Buyer Documentation in Vessel Sale and Purchase Agreements
Vessel sale and purchase agreements involve a significant amount of documentation, and it's easy to overlook when additional requirements might come into play. While the documentary heavy lifting falls primarily to the Seller, Buyers have obligations as well which attract less attention but are no less important.
In cases of a Buyer being a corporate entity rather than a natural person (whether as the original contracting party or as a nominee designated after the initial contract is executed), there are extra steps to verify the entity's legitimacy and good standing, and to ensure that the individuals acting on its behalf have proper authority to do so.
To meet these expectations, buyers will typically be required to provide some or all of the following:
Proof of Good Standing: Official evidence that the entity is in good standing under the laws of the jurisdiction in which it is incorporated.
Consent Action or Resolution: A written resolution authorising the purchase of the vessel - and confirming that the individual delivering or accepting the vessel or carrying out the purchase and sale agreement is authorised to do so.
Power of Attorney: Where a representative will be delivering or accepting the vessel on the company’s behalf, a power of attorney is usually needed.
Depending on the agreement, and the vessel’s flag state requirements, further documentation may be needed. Together, these documents ensure that ownership can be safely transferred.
If you have entered into, or are considering entering into, a vessel purchase agreement, or have questions about using a corporate entity as a buyer, please contact Peter Dawson on +64 27 229 9624 peter@maritimelaw.co.nz, Troy Stade on +64 27 368 6730 troy@maritimelaw.co.nz, or Petrina Sheldon on +64 20 400 88909 petrina@maritimelaw.co.nz