I recently read a very interesting article from BoatU.S. Magazine called “The Boating Myth That Won’t Die”.  With the economy still stagnating every state is revenue hungry and looking for uncollected taxes. Cruising boaters crossing state borders may find themselves in troubled waters if they linger too long in one area. The article was about a family who sailed their vessel on the eastern seaboard from Florida to Maryland. Along the way making stops in a few counties in North Carolina, when they arrived at their new home in Maryland they found mail from the state of North Carolina concluding they had personal property in North Carolina and therefore were subject to taxes in North Carolina.

I found the information below to be interesting in that typically clients will register their boat here in Delaware and cruise around the world docking in numerous parts of the world. Below is an excerpt:

A common misconception in recreational boating circles is that federal documentation of a privately owned boat by the USCG exempts the vessel from state registration, and thus taxation. This is NOT the case. In fact, most states require vessels kept in their waters for prescribed length of time, most commonly 60 to 90 days, to register and obtain a state sticker to indicate that the owner has paid the required taxes.” 

So the message to take from all this is make sure that if you’re cruising your vessel from place to place and are registered in another state beware of the length of time that you are stationed in each location as you could be subject to taxes.

The total number of LLC’s filed in DE from 2004 to 2009 was 519,000. The total number of Inc.’s filed during the same period was 189,000. There were 329,000 more LLC’s filed in DE than Inc.’s in that six year period. The most dramatic increase in the LLC’s filed occurred between 2005 and 2007. Through that two-year period there was an increase of 40% more LLC’s filed when compared to 2004. In 2007, there were 112,982 LLC’s filed in DE versus 68,807 filed in 2004. The total number of Incorporations has fallen every year since 2005. The dramatic economic crisis which began in 2008 had an impact on each entity type; although the LLC still out paced the Inc. by more than 50%. Why are these numbers important? What can we learn from them?

Well, first of all when you consider that the Delaware Incorporation has been in existence since the 1800’s and the Delaware LLC since 1991 – this change has obviously occurred over a very short period of time. The LLC is now the most popular type of entity filed in America. In fact; according to the study, the LLC is being filed by almost 11 to one over the Inc. in some other states.

Business people from all walks of life are placing a great deal of trust in this relatively young corporate entity type. In the past, most business endeavors sought the structure of the corporation to provide stability. The security, flexibility and informalities associated with the LLC have made it an obvious choice for many entrepreneurs and investors. We now live in a world that is more litigious than ever and your business deserves ample protection as do you and your assets. The LLC can typically shelter any type of business or assets and provide separation for the individuals involved. It is very simple to operate and the burden of management associated with a stock company is greatly reduced.

However, the most important factor is still – trust. The LLC has withstood the legal challenges of the past 19 years and has established itself as a very worthy entity. Also, we can conclude that the LLC is helping many individuals and small groups realize their business potential. The LLC is very well suited for a more intimate business strategy. The privacy offered is also appealing to many; since we are all faced with the threat of identity theft in this age of immediate information.

Harvard Business Services, Inc. has been filing LLC’s since 1991. We know firsthand how valuable the LLC is to most business people. The LLC may be just right for you and if there is strength in numbers…..well you will be joining a very strong group!  We can help you file your LLC today.

Why? Although the airplane is one of the safest ways to travel, accidents do happen. If you own an airplane you should consider using this same technique to maximize your liability protection. By owning the airplane in a Delaware LLC you shield your personal assets from creditors in case of an accident and/or lawsuit. For the best protection, let’s take a look at how Harvard Business Services, Inc. can help.

Bill, the owner of an airplane calls up HBS and asks “I own my own plane and I want to protect my other assets from liability arising from the plane? They tell me a Delaware LLC is one of the best asset protection entities, is that true?”

Yes it is, Bill, and here’s how we can help:

• We can form a Delaware LLC for you which will own the plane and provide you with asset protection and anonymity of ownership.

• We can form separate LLCs for your other major assets, to keep them out of your name alone.

• If you are sued for an accident, we can supply you with Certificates of Good Standing proving the validity of your multi-entity structure. With the strongest asset protection by law, a Delaware LLC will help provide another layer of protection that will make lawyers reconsider suing you personally.

• If you own a home, having a Delaware LLC could help provide protection from someone coming after your home and causing you to loose it. Also, be sure to check your State’s “Homestead Laws” as these laws vary from state to state.

• If you own any other real estate such as a farm, beach house, etc. be sure to put these in separate Delaware LLCs. This will place a big brick wall up helping you to protect each individual asset you own, and it will help you with your estate planning, as well.

• There may also be tax advantages to using multiple entities depending on your individual tax bracket and situation. For tax information you should consult with your accountant or tax professional.

Many of the major airline companies worldwide are incorporated here in Delaware to protect their assets. Why Delaware? Because Delaware’s legal infrastructure will stand behind you if you’re sued.

For detailed information on how HBS can help protect you as an aircraft owner click HERE.

We also understand the special needs of an aircraft owner as HBS offers a unique FAA Mail Forwarding Service, for detailed information click HERE.

To start protecting your assets, call Harvard Business Services, Inc. to get your aircraft and other major assets into separate Delaware LLCs today. 1-302-645-7400

Un acuerdo de la LLC puede ser un documento escrito o un entendimiento hablado.  Sin embargo, por lo general, un acuerdo escrito esta usado dado a que observe el entendimiento y los acuerdos de los miembros, por la cual en el evento de una discusión o mal entendimiento (o la posibilidad de un litigio), es una protección invaluable del interés de todos  los miembros involucrados.  Aunque cada acuerdo de LLC es diferente, un acuerdo de LLC generalmente incluye ciertas condiciones fundamentales como:

• El porcentaje de propiedad de cada socio/miembro
• La manera en que la ganancias, pérdidas y gastos están asignados
• La autoridad de los socios de unir la LLC y participar en la administración de a día
• Los derechos de votar de cada socio en los momentos de tomar decisiones claves
• Las circunstancias en las que un socio puede abandonar la LLC y la manera en que los intereses económicos del socios están calculados en el momento del abandono
• La habilidad de un socio de vender o prometer su interés a una tercera persona
• Términos contemplando el fallecimiento o discapacidad de un socio
• Las circunstancias y términos para la admisión de nuevos miembros
• Las circunstancias en las que la LLC pueda ser liquidada y la prioridad de los reclamos entre los socios en el momento de la liquidación.
• Derechos de indemnización (si existen) en caso de que  la LLC o los socios sean demandados en conexión con los negocios de la LLC.

Delaware no requiere el registro ni la publicación del acuerdo operativo de la LLC. Generalmente, una LLC de Delaware está constituida de forma anónima por el registro del Certificado de Formación con el estado que incluye solamente el nombre de la LLC y la oficina del representante (agente) autorizado (Harvard Business Services).  Esto es todo!!!

Harvard Business Services, Inc le puede asistir en formar su LLC y tenemos muchos tipos de acuerdos de LLC que se pueden usar como están o le pueden servir como buen lugar donde empezar a desarrollar sus propias condiciones y provisiones. Nos pueden llamar al 800-345-2677 Nos haría felices, darle más información.

To read the English version of this blog post, click HERE.

After some research and a phone call to the Delaware Dept. of Natural Resources (DNREC); I have compiled some basic facts which will hopefully assist those who wish to pursue such registrations in Delaware.

1.) DNREC – this is the place to start – Delaware Dept. of Natural Resources – they can be reached at 302-739-9916 or by web at: http://www.dnrec.state.de.us/fw/boatregs.htm
They are very friendly and professional and will be happy to assist with any questions or issues.

2.) State of Delaware Boat Registration Application – this is necessary to renew a boat registration in DE and can be accessed online at the DNREC site. For those registering a new vessel; typically the registration is handled by the sales agent or directly with the DNREC office. The information required to renew or register an existing vessel will include: Proper Bill of Sale and or title or certificate of origin, boat type, description of the vessel including length, hull construction, type of use, sanitation devices, method of propulsion, type of fuel and manufacturer – factory or home built.

3.) The vessel must be kept in Delaware or Delaware waters for a minimum of 60 days per year in order to maintain a valid DE registration.  The DNREC officers will check the data of existing registrations and inspect dock slips and marinas to verify. Enforcement of those who are not in proper standing can result in fines and loss of registration. Obviously, all Delaware registered vessels must adhere to both Delaware Maritime Laws and U.S. Coast Guard rules and regulations as well.

4.) Fees are based on vessel size and any additional requested permits or certificates and can be reviewed online.

The Delaware LLC provides a very safe and secure shelter for boats and many other assets. If you are considering such a registration call Harvard Business Services, Inc. to file your LLC and contact DNREC for the details on the registration of the vessel. Safe boating to all!