Ship co-ownership: an essential guide to understanding your rights and obligations

By Yasmine EDDAM17 April 2025

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Sharing the ownership of a boat, whether it's a sailboat for leisure, a trawler for fishing or even a commercial vessel, is a solution that appeals to many people. It's a way of pooling acquisition and maintenance costs, and sharing a passion or an economic activity. However, this shared ownership is not simply joint ownership, as is the case for a holiday home. French maritime law provides for a specific and fairly complex system: co-ownership of ships, where the shares are called "quirats".

Whether you are considering investing in a joint venture, are already a co-owner or even a potential creditor (supplier, bank, etc.), it is essential to understand the main principles governing this type of ownership and operation. How is co-ownership created? Who makes the decisions? Who is responsible for debts? How does it end? This article gives you an overview of the key points you need to know.

What is ship co-ownership and how can it be set up?

Joint ownership of a vessel is a legal form in which several people (natural or legal) jointly own a single vessel. Each co-owner holds one or more shares called "quirats". This system differs from traditional joint ownership in that it has its own operating rules, particularly for decision-making.

Sa implementation is not informal. A written document is required to record the agreement between the co-owners and define their respective shares. Without this document, the agreement is null and void. Even more important for relations with third parties (suppliers, insurers, authorities, etc.), joint ownership and the identity of the joint owners must be set out in a written agreement. official advertising. This is done by registering the ship and free-forming it (if the conditions are met) with the customs authorities, who keep a "registration card" detailing the ownership. It is this registration that makes co-ownership enforceable against third parties and enables you to prove your status as co-owner to them.

How does decision-making and management work?

Forget the unanimity rule, which is often cumbersome in joint ownership. Joint ownership of a ship is governed by the law of the majority of interestsi.e. quirates. Decisions relating to the operation of the vessel are taken by the co-owners representing more than half of the shares. Each share gives the right to one vote. For certain very important decisions (such as mortgaging the vessel or selling it voluntarily), however, qualified majorities (calculated by value) or even unanimity are required by law. Minority shareholders have legal recourse if they feel that a majority decision is abusive, although this recourse is difficult to enforce. It is essential that the rights of shipowners are respected when decisions are taken. Co-owners must therefore ensure that every voice is heard and that decisions reflect the collective interest, while protecting the rights of minority shareholders. Regular meetings can also be set up to discuss issues, to foster a climate of cooperation and transparency among co-owners.

The day-to-day management of the vessel can be entrusted to a managerappointed by the majority. It may be one of the co-owners or a third party (individual or company). The manager has extensive powers to act on behalf of the co-ownership in dealings with third parties (suppliers, customers, crews, etc.). Please note that the appointment of a manager is optional. If no manager is appointed and whose name is published, the law considers that all co-owners are collective managersThis has major consequences for their liability.

What are the rights and responsibilities of a co-owner ('quirataire')?

Being a tenant confers specific rights. You hold a share of real ownership on the ship, giving you the right to a share of the profits (and the obligation to contribute to the losses) in proportion to your shareholding. You take part in collective decisions through your vote. In principle, you also have the right to sell or give your shares freely to whomever you wish. However, this transfer must be published on the registration form if it is to be enforceable against third parties. Until this is done, the seller remains liable for any debts incurred prior to publication.

The most sensitive point is undoubtedly that of the liability for debts of co-ownership. The legal system, based on the law of 1967, amended in 1987, is a two-tier system:

The managing partners (those designated as such, or all the shareholders if no manager is published) are indefinitely and jointly and severally liable debts on their personal assets.
The non-managing directors have a responsibility indefinite but only joint Each person is only liable for their share of the vessel.

However, and this is an important feature, non-managing shareholders may conventional layout their responsibility. They can either limited to the amount of their share (their personal assets are then protected beyond that), or on the contrary agree to be jointly and severally liable. But be careful, to be valid vis-à-vis third parties, any agreement modifying legal liability must be in writing and published on the ship's registration card. Without this publication, the legal rules (joint and several liability for managers, joint liability for non-managers) apply. It is therefore essential to clearly define and publish the liability regime chosen.

How are debts secured and how does co-ownership end?

To guarantee co-ownership debts (such as a bank loan), it is possible tomortgage the vessel itself. But this requires a decision taken by a very qualified majority of co-owners (representing 3/4 of the value of the vessel). A joint owner may also mortgage his own share for his personal debts. The terms of end of co-ownership and its tax aspects deserve particular attention.

Co-ownership is not eternal. It comes to an end for various reasons voluntary sale decided by the co-owners, the forced sale on seizure by a creditor, or court decision in the event of an insurmountable blockage. The loss of the vessel or the reunion of all the shares in a single hand also puts an end to it. Dissolution entails the auction of the ship, followed by the liquidation The remaining debts are paid and the balance is shared between the joint owners.

A special tax regime?

From a tax point of view, ship co-ownership operates on the principle of tax transparency. It is not the co-ownership that is taxed, but each member personally on the share of profit (or deficit) to which it is entitled, in the category of Industrial and Commercial Profits (BIC). This individual profit is calculated after deduction of the depreciation of the share of the vessel held by the joint tenant and any finance costs. Specific tax incentives, such as the 1996 "Pons Law", existed in the past to encourage investment, but they are no longer applicable to new operations. However, co-ownership of a vessel may come to an end if the partners decide to liquidate their shares or if the vessel becomes unusable. In this case, it is essential to carry out an accurate assessment of the value of the assets and to share any profits or losses accordingly. This situation highlights the importance of good management and anticipation of fluctuations in the maritime market, essential considerations that fall within the general legal framework for inland waterway vessels.

Ship co-ownership is a specific legal instrument with its own advantages and constraints. For a personalised analysis of your situation or assistance with your procedures, our team, specialising in commercial and maritime lawis at your disposal.

Frequently asked questions

What is a quirate in ship co-ownership?

The quirat represents the share of ownership held by a co-owner in a jointly operated vessel. Each co-owner is therefore entitled to participate in decisions concerning the operation of the vessel, according to his share of the quirate. This concept is essential for understanding the principles governing the constitution and operation of joint ownership of ships, which govern relations between partners in the management of a common asset. Transparency and communication between the co-owners are crucial to the smooth running of the vessel.

Is a written deed required to create co-ownership of a ship?

Yes, a written deed recording the agreement of the co-owners and their shares is required for the co-ownership to be valid.

How are decisions made in a ship's co-ownership?

They are taken by a majority of the shares (quirats), except for certain important decisions which require a qualified majority or unanimity.

Is it compulsory for a ship's co-ownership to have a manager?

No, the appointment of a manager is optional; in the absence of a designated and published manager, all the co-owners are considered to be managers.

How do you prove that you are the co-owner of a ship to third parties?

Proof is mainly provided by recording the name of the co-owner and his shares on the ship's registration form and the free registration document.

Is the co-owner of a ship responsible for all debts?

It depends: the managing partner is liable indefinitely and jointly and severally; the non-managing partner is liable indefinitely but in proportion to his shares, unless there is a published agreement to the contrary.

Can I limit my financial liability as a proxy?

Yes, a non-managing shareholder can limit his liability to the amount of his share by means of a written and published agreement.

Can I sell my share (quirat) freely?

Yes, in principle, the transfer of quirates is unrestricted, but it must be recorded in writing and published to be enforceable against third parties.