A dream yacht: successful purchase – just start

In case of yacht purchase at the yard the owners shall choose her flag and ownership structure at their own discretion. But in case of yacht purchase from the previous owner the new one faces some questions.

First, is it reasonable to preserve the current registration or company (in case of purchasing owner’s shares).

Second, if yes, is it suitable to comply with service terms of local agents engaged by the previous owner in company/yacht case.

Interlegal yachting team has faced such a case recently.

The Client purchased shares of a foreign company – yacht owner. Local lawyers (acting as registration agents) led the procedure for re-registration and further company management. Following reregistration of shares, the company was still managing them, while the Buyer became a new shareholder and received from agents a series of service bills.

Interlegal task was to find out and to arrange the scope of services rendered by agents. In the process of negotiations with local lawyers, Interlegal team studied the terms of company management, tariffs for extension and execution of basic documents (Powers of Attorney, yacht documents), as well as calculated Balance Sheet upon the current settlements with agents.

Negotiations resulted in receiving by the Client all the necessary information regarding agents’ terms and cancelled invoices (they turned out to be issued erroneously). Interlegal also provided several options aimed at improving the company ownership structure in respect of changing the company and the yacht registration: the Client took it into account in order to assess, whether it is reasonable to preserve the current yacht ownership structure.

Finally, in case of acquiring corporate rights from the yachting company, we recommend due diligence of the company and the yacht, including verification of registration agents and local representatives.

As soon as yacht is purchased from the previous owner, one should not forget about possibility to cooperate with those you chose by your own will, not with those you had to engage.

Interlegal lawyer Mariia Ktrichian, managed by senior associate & head of Yachting department Valeriia Fetysenko, led the case.