The legalities
For centuries, ships have been owned by groups of more than one person. The cost of building and running a merchant ship was as high then as it is today, so it was normal to club together to raise the necessary funds. The Merchant Shipping Act of 1854 provided for this in law, enshrining the principle that a vessel of any kind consists of an easily divisible 64 shares. If you’ve bought a yacht, your bill of sale will have stipulated how many 64ths you owned – so if you’re the sole owner, you’ll own 64/64ths.
SARAH MORGAN, at the Marine and Coastguard Agency Directorate of UK
Ship Register, explained, however, that if you have an odd number of owners, ‘fractions of shares are not permitted, if a vessel is owned by an odd number of owners one of the owners would need to have a non-equal number of shares.’
If any of your syndicate are not British, that shouldn’t prevent you from registering your boat in the UK.
‘Any EEA, EU, Commonwealth or Schedule 6 country national is eligible to be an owner of a Part 1 vessel. For Part 3 as long as the owner is a resident in the UK for 185 days a year and are either a EU, EEA or Commonwealth citizen they are eligible to register,’ she says. So you would only run into problems if a majority shareholder did not fit this description.
There are other pitfalls to look out for, however. Mandy Peters, RYA legal executive explains: ‘As with everything in law, considering how to go about a shared ownership arrangement is a lot about common sense. The most important thing is to have paperwork in place that shows clearly the position of each person. Who owns what, their responsibilities, what they are entitled to.
‘Every year people enter into boat share arrangements without any kind of paperwork. The thing is, that works fine until it doesn’t. The main problem we encounter is there being nothing in writing for someone that decides they want to get out of the arrangement. If it’s not resolved, the whole thing can end up in court and the boat is sold, which is costly in itself.
‘We produce a standardised legal share template that is free for our members to download from the RYA website. It also comes with some guidance notes – well worth reading if you’re considering going into a syndicate arrangement.’