Manufacturer's License???

Discussion in 'NFA/Class 3 & FFL Discussion' started by CourtJester, Aug 27, 2013.

  1. CourtJester

    CourtJester Well-Known Member

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    I've done some google searching and I can't seem to find much on the matter, so here's the deal...
    I've been less than thrilled with my boss for a while. Good paying job, secure industry, salary position managing the largest plant of its kind in the US, second largest in the world... Blah blah.

    Got an interview with another company making a good bit more right down the road. In the end though, I'm sure that I'll still be pissed at something three years from now. So I'd like to do my own thing.

    I worked at a machine shop for 5 years in the past and have spent 80% of my career in manufacturing. Toyota, John Deer, Cat, etc. I'd be interested in doing my own thing now and have "some" money to get started.

    So where do I go to find information on manufacturing requirements? License needs, building safety requirements, shipping requirements, and paperwork requirements on everything? I'm sure it's not something I can do out of my basement and/or garage. So what's needed and where might one find 1000+ AR lower receivers? In time I would like to invest in machinery and start making hang guns.

    I'm really just in the pondering pipe dream stage, but $hit, if RGuns can stay in business in Illinois, I could do some amazing things here.
     
    Last edited: Aug 27, 2013
  2. mountainman13

    mountainman13 New Member

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    Hit the ATF website. You should be able to find all the info you need there. It's big money to get into manufacturing.
    As with anything firearm related licensing issues will be based on state and local laws,zoning and ordinances.
    You're a long way off from needing 1000 lowers but when you're up and running and have the proper licensing and workforce you'll go manufacturer direct.
    BTW manufacturing tends to be a nightmare filled with constant problems. Big contracts= big issues from small problems.
    Simple example you need 50 rifles done on date X or you don't get paid. One week before date X one of your builders cracks a lower. You don't have a spare and can't get another until after date X. You don't get paid.
    Don't make the same mistakes as others. Plan ahead and make sure you have extras.
     
    Last edited: Aug 27, 2013

  3. CourtJester

    CourtJester Well-Known Member

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    Good info. Thank you sir.
     
  4. orangello

    orangello New Member

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    One of my nephew's buddies has the FFL7 or w/ever it is to "manufacture". I'm not sure exactly why he got it, as he is a beginner gunsmith. His facility is in a detached garage/shed on his property, outside of city limits.

    He did a fine job fixing my lil .22 pistol.
     
  5. c3shooter

    c3shooter Administrator Staff Member

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    In a nutshell, you will need a premises that will permit you to operate a manufacturing business there (zoning) a business license, an 07 FFL (manufacturer) to be registered and have paid fees for ITAR http://pmddtc.state.gov/regulations_laws/itar_official.html And have some GOOD bookkeeping skills- you will need to periodically pay the Federal Gummint an EXCISE tax on each gun you make.

    Start by sitting and talking with an ATF Industry Inspector. Most are decent folks and can help get you up to speed.

    I would also STRONGLY encourage you to set up a LLC to isolate the business assets and liabilities from yours. Otherwise a products liability lawsuit will take your house, car, kids college fund, and your fishing rod. If you do not have business insurance, talk to the NRA.

    If you have not run a business before, go sit down with a guidance counselor at your local community college. Most of those teachers ARE business people that teach 1 class a semester, and they know things you will need to know- like over how many years can you depreciate that lathe you bought.
     
  6. pomfirearms

    pomfirearms New Member

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    I think someone doing simple gunsmith work gets a 07 manufacture FFL license. Good luck on your venture.
     
  7. CourtJester

    CourtJester Well-Known Member

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    I don't see a like button on the iPhone app. But OUTSTANDING sir. Thank you
     
  8. c3shooter

    c3shooter Administrator Staff Member

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    Pom- basic gunsmithing (repair) is under an 01 FFL, same as a Dealer. However, to make firearms for sale, 07. A smith CAN make the occasional gun for sale, but to be turning out dozens or hundreds, 07, plus the ITAR registration and fees, unless you are granted a CJ determination (Commodity Jurisdiction) Unless your only buyer of ARs is a police dept, you will not get a CJ, and the ITAR fees are significant.

    Which is why I said talk to an industry Inspector.
     
  9. 1911love

    1911love New Member

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    ITAR is such a farce, talk about a way for the government to fleece you of money. Read the regs, even if you don't export you still have to pay. WTF! They say it's supposed to monitor the arms trade, but if you don't export that is the purpose of an 07. ITAR is a direct attack on the 2A and small business.
     
  10. LowercaseJay

    LowercaseJay New Member

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    I can tell you this: your gonna need a type 07 FFL. This gives you a license to buy, sell, repair, assemble, and manufacture firearms. It's the whole package, but expensive. ITAR alone is, if I remember correctly, is $2,250/year. FFL07 is $150 for 3yrs ($50/year). There are fees that aren't recurring but are required such as fingerprint cards, COE and such. Even though you might not be able to run a manufacturing company in a residential area, you can run an online retail store and use your FFL to buy wholesale and use dropshipping to your customers. But you'll still have to report the number of firearms manufactured to the ATF even if it's zero. If you plan to do business at your manufacturing site your gonna want to look for a place zoned as light industrial. Your city hall can help you with zoning ordinance, it'll be a good idea to have this taken care of before submitting your application to the BATF because this is one of the major reasons they'll deny your request (also remember name and contact info for the person who helped you with zoning, BATF is gonna call them anyway so it helps if you're both talking to the same person.) BATF will tell you just about everything you need to know from storage requirements, acquisition and disposition, fees, etc.

    I'm working on mine as well, so good luck, I hope this helps
     
  11. bigguns1959

    bigguns1959 New Member

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    FFL for manufacturing

    Lowercasejay is exactly right. ITAR is something you can't get around at least for now. It is an good way to get started assembling and selling. If you are looking to buy from abroad you will be able to import and save yourself alot of money, you should consider it since you will have to do the paperwork anyway and I mean you have to send a report if you do any work or not so you you might as well take advantage of having the 07 FFL. It really makes no sense for those of us that want to build American made products and have to pay the fee to ITAR.
     
  12. 1911love

    1911love New Member

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    ITAR is the biggest crock of SH!T and an outright scam on business owners. It even says it's purpose is to monitor the export of arms. The next sentence says even if you don't export you still have to pay. WTF???

    Sorry for the rant, but every time I see or hear ITAR I get pissed.
     
  13. ZeusEcho

    ZeusEcho Member Lifetime Supporter

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    What is required to gunsmith on NFA items like SBRs, or to build SBRs for cutomers? Not high volume, having the customer fill out the NFA forms to make the lower into an SBR.
     
  14. saputoarms

    saputoarms New Member

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    I believe if customer buys reciever from you and all the parts, then has you "gunsmith" them into a complete unit you are ok. Since the receiver is what comes into your A+D book, and you sell that then asemmble with other parts customer bought you are legal. Now I only tell you this for AR's. Since I got this direct from ATF officer. If an AR is considered an SBR then yes my info is good. Oh, and that is in the good state of Indiana. Meaning the Fed told me one thing, but you also must be compliant in your state.