Inspected vessels carry more than six paying passengers and need USCG approval. Uninspected vessels have their own set of rules.
There are two classifications of passenger vessels: inspected and uninspected. As the terms suggest, an uninspected vessel doesn’t require a Coast Guard inspection, while an inspected vessel does. There are still legal requirements for uninspected vessels.
The quick answer is:
Uninspected vessels can carry up to six paying customers. Any more than that requires the vessel to be inspected.

Generally, an Uninspected Passenger Vessel carries a maximum of 6 or fewer passengers and is less than 100 GRT. These include your typical charter boat, fishing guide, or small tour boat that may use a state registered boat. These are referred to as UPV, 6 Passenger (pax), or 6-Pack operations. The type of vessel does not matter, so long as at least one or more person is paying for passage.
UPVs traveling on navigable waters of the United States under USCG jurisdiction aren’t required to be inspected by the Coast Guard. However, they must comply with federal standards for safety, navigation, and pollution prevention. At a minimum, the vessel operator must hold a valid Operator Uninspected Passenger Vessel (OUPV) license.
The term “uninspected” can be misleading, because there are still Coast Guard requirements that need to be met to operate the vessel; uninspected does not mean unregulated. The vessel must be registered, have proper safety equipment (lifesaving devices, fire extinguisher, etc.), lighting, and distress signals.
You can find a checklist with the minimum standards in the UPV 6 Pack Inspection Form. These standards are for commercial vessels, not recreational ones. Vessels that pass the examination will receive a UPV decal for display on the vessel.
The captain of the UPV needs to hold one of the following USCG licenses for the route they are working on:
Note: The 12-month grace period only applies to the amount of time you have to renew your license without starting over. You can’t operate a vessel with an expired license, so make sure to renew your license in plenty of time before it expires.
An Inspected Vessel is one inspected by the Coast Guard and that has been issued a Certificate of Inspection. Vessels require a USCG inspection when they’re carrying more than six paying passengers.
Once the vessel has been inspected and approved by the inspector, a CG-841 - Certificate of Inspection is issued. The certificate includes details about the vessel such as: its equipment, the route the vessel may travel, the minimum manning requirements, the number of passengers that may be on board, the names of the owners and operators, and the period of validity.
The specific inspection requirements depend on the size and type of vessel.

Vessels subject to inspection require an initial inspection for certification before they’re put into service. After being put into service
To avoid a lapse in inspection, the CG-3752: Application for Inspection of U.S. Vessel form must be submitted at least 30 days prior to the expiration of the vessel’s Certificate of Inspection.
Note: The Coast Guard, on its own initiative, may examine or inspect or reinspect the vessel at any time.
Inspections of vessel safety systems includes the following:
Inspections of vessel security systems includes the following:
The Coast Guard Marine Inspectors published a report of the top 10 most common deficiencies they found during inspections of Small Passenger Vessels. We recommend reviewing this before scheduling your inspection.

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Nate Gilman is President and Co-Founder of MM-SEAS. He hawsepiped from the deck to a 3rd Mate Unlimited license with full STCW compliance over more than 15 years at sea, and is a veteran of the NOAA Commissioned Corps. He works directly with the National Maritime Center, USCG-approved training schools, and vessel operators on credentialing policy, and writes on sea service documentation, evaluation standards, and how mariners move up the license ladder.