Marine Capsule

1. Parties to a Contract: Sale or offer

DESIGNATION

In an offer or a sales contract, there must be 2 easily identifiable blocks: BUYER and SELLER. Each block lists the names and the addresses referred to these block titles.

PHYSICAL PERSONS

Each physical person must have the capacity to act. If the sale is an international one (different citizenships involved), it is strongly recommended that all signatories have the legal age required by the law existing at the address of each party and in accordance with the citizenship.

  • It is important that the names and addresses of the parties match the name and the address appearing on an official document proving where they live. A car driving license is an example.
  • For documents in relation with vessels already registered in Canada or vessel that will be registered in our country, the initials in the first name of the buyer are not accepted. Ex.: John H. Clarke will be refused but John Clarke or John Harry Clarke will be accepted. The seller may use initials at the condition that the boat is not already registered according to Canadian law. The Registration  will be detailed in Marine Capsule no. 3, Registration, Canada and other countries.

Identification of physical persons

At least one identification document, with picture, must be presented in order to confirm that the names and addresses of the parties agree with the information appearing on the documents.

MORAL PERSONS (Company, Family Trust, Registered Name, etc.)

Canada

Company

It would be important to get, in writing, the following: 

  • Search Certificate coming from an official source confirming that the moral person really exists and that its statute is regular. The name of the administrators should be indicated. In Quebec province, there is the IGIF system (Inspector General of the Financial Institutions) also called CIDREQ. Each province has its own system. At the federal level, there is the "Corporation Canada"system.
  • Resolution or Power of Attorney authorizing the signatory to sign the sale or purchase documents. The signature of the persons who signs on the Resolution/Power of Attorney must be witnessed by a Lawyer, a Notary or a Commissionner for Oats.

Family Trusts, Registered Names, etc.

Family Trusts, societies and other entities of persons are only accepted for the boats having a Vessel Licence not for Certificate of Registry.

Family Trusts had, a certain time, been accepted for the registered boats at the condition they were registered in the Company Registry Systems (IGIF) system but, since April 1st, 2007, they are no longer accepted. If such an entity already owns a registered boat, the only transaction that can be made is a sale. The  dealer is a merchant, therefore.

A Registered Name belonging to a corporation may do all the normal transactions in relation with a registered boat.

Boat Dealers

A boat dealer who sells an unregistered boat (Ex.: New or with a Pleasure Craft Licence), does not have to provide a Search Certificate or a Resolution. As is a commercial seller, he acts in the normal course of his business.

If the boat owned by the dealer is registered in his name, he will have to provide a Search Certificate and a Resolution.

It often happens that a dealer acts as a yacht broker. The reason is, if he had the boat in his inventory, he would have to charge sales taxes thus, decreasing his chances to sell the boat. The real seller is not him. The sale would probably be a sale between private.

Other countries

If the vessel is purchased outside of Canada, a search is mandatory. All the countries and, often their provinces/states, have vessel registration systems (Florida, United Kingdom, British Virgin Island, etc.).

Should the seller be a corporation, a search certificate is mandatory. This search certificate is often called “Certificate of Good Standing”. In addition, a Resolution or Power of Attorney, witnessed by a Notary or by a Lawyer is needed in order to complete the transaction.

Payment to the seller

When a moral person or company is selling, the payment of the boat will be made in favor of the seller, not in favor of one of his administrator unless the company has given a written authorization to do so.

We suggest you read Marine Capsule no. 7, Selling price, payment and holdback, for more details on this subject.


This writing is a short summary of some of the topics to consider in relation with a vessel purchase, sale or credit.

Each transaction is a special case.

 
    
© 2017 Hébert et Associés Conseillers Maritime
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