To be eligible for USCG documentation, a vessel must meet certain criteria such as size (at least 5 net tons) and must be wholly owned by a citizen of the United States. Vessels that meet those requirements and are to be used for certain commercial activities must be documented.
Vessels that meet the above requirements and are used exclusively for recreational or sporting purposes do not need to be documented. However, they can be documented, should the vessel owner choose to do so.
The Code of Federal Regulations describes who does and does not need vessel documentation in greater detail.