In both Alliance and Foundation controlled space, as well as Joint Space, the Merchane Marine is an organization of private-sector, civilian ships, that serves as a space-naval auxiliary in times of war.
The Merchant Marine is an indepedant organization. In the Alliance, membership in the Merchant Marine is not considered mandatory, although it is so in GS and joint space, as well as regions controlled by many Alliance member-worlds. Since very few ships operate where registration is not mandatory, nearly every civilian ship is a part.
In times of war, Merchant Marine vessels can be called upon to deliver troops and supplies, but may also be used in combat depending on armament, or modified for mine-laying duty. Since membershp in the Merchant Marine entitles civilian ships to arm themselves to varying degrees, some can serve as warships.
Controversy Over Armament
In the early days of space travel, piracy was relatively rampant. Though the Alliance and the Foundation made a broad millitary presence, the problem persisted. The Foundation saw an obvious solution: arm civilian ships. The Alliance, of course, would hear of this, and passed numerous laws limiting the weapons fitted to civilian-owned spacecraft.
These laws were seldom enforced in joint space as the Foundation was the primary policing power, and did not exist at all in GS territories. However, there were few cases in both joint and Alliance space in which civilians were fined or even jailed for "illegal" weapons (most bought legally from the Gudersnipe Foundation). In a rare political move, the Foundation used each case to stretch the limits of what civilian vessels could legally obtain. By the mid Second Age, civilian vessels could legally carry the same weapons as most warships. Very few did, but it certainly helped deal with the piracy problem.
Current Weapon Status
Various laws eventually restricted weapons control. Primarily, these laws centered around weapons that were not exclusively ship-to-ship and could be used against other targets. Both to keep these weapons out of the hands of pirates and to prevent domestic terrorism, the Foundation inforced a permit system to help track which weapons went where. Civilian vessels could easily obtain array-type weapons that fired energy beams, but missiles equired a lengthy licensing process and a strict series of permits.