That's exactly what the EITC did for its East Indiamen, so that's fair enough.What you CAN do is get a LoM and a merchant letter. That is quite possible and basically makes you a Privateer who doesn't need to worry about signing articles with his crew.
You shouldn't lose your merchant letter as long as you don't commit any actual acts of piracy.
Would this work?Demotion for navy officer is currently a bit of a tricky thing; needs to be looked in further. Some time.....
All companion ships mutiny. Or, if that's too harsh, is it possible to have them become independent ships serving your former served nation? You lose your professional navy status as the navy doesn't want pirates in its ranks, even minor ones, but the other ships are still loyal navy ships.
Now you're a privateer. Lose relation points and demote accordingly. If you had enough relation points to survive that then you're still a privateer - you're no longer welcome in the navy but in view of your past service the nation still may have use for you. Otherwise, if the loss of relation points takes you below 0 then you're kicked out entirely as if you had been a privateer in the first place - lose the LoM as well.