Noobie - NON home-based FFL questions

Discussion in 'NFA/Class 3 & FFL Discussion' started by rboatright, Aug 1, 2010.

  1. rboatright

    rboatright New Member

    Hi. Having tread through the entirety of the "home based ffl" thread, I felt a desire to open up on on the other side.

    My business partner and I have been considering applying for an FFL 01 for some time.

    We both fear that with a bad habit of buying and fixing up barn and truck guns, and then selling them, that I come dangerously close to treading on the "establishing a business" limits already.

    If we had the FFL in place, it would simplify that buying and selling, and open the door to buying low and selling high sometimes on guns which do NOT need massive over-hauling.

    Considerations: C-Corp already exists. Setting up a DBA under the C-corp for an FFL is a matter of an hour or less. My partner is our accountant, she can set up cost-centers for that inside our accounting system in her sleep. We have offices in a commercial building in an area zoned as industrial. Our landlord would LOVE for us to have an FFL, it would ease HIS purchases. Security system is redundant and already installed. Or business insurance agent can extend our existing liability and malfeasance software to cover the sales of firearms at a very small increase in premium. (Trust me that errors-and-omissions insurance for people who write payroll software is not cheap.) Ditto theft and other losses insurance.

    Yet, every time I bring this idea up in any of the other forums I hang out on, I get "oh no, oh no, you don't want to get an FFL 01, it's far too much hassle and really you don't want to do it."

    I'm thinking that this looks a lot like the sort of accounting and record keeping we've already been doing for 25 years.

    Here's the concern I have, and I've read over the damned ATF site a few dozen times, and I can't answer this. I suspect you folks can.

    I really ENJOY stripping down old beat up barn and truck guns and making them nice again. It's a way to get the hell away from the computer. But I'm sure as hell not going to do that at my office. :) Among other issues, the thought of metal filings around the server bank makes me shudder. Plus, my wife already complains that I'm away from home too much.

    Is there a way to do it legally where I do NOT register the shop at home as a location of the business, and transfer the gun out to me as an individual from the corporation, I take it home and mess with it for a while, and then transfer it back to the corp and we sell it, or am I making a mountain out of a mole-hill?

    (and yes, if on the basis of this discussion you think that it would be far smarter to register as a manufacturer rather than as a dealer, ok, no big deal it's the same paperwork basically.)

    THoughts? Comments?


  2. c3shooter

    c3shooter Administrator Staff Member

    Go for it! You already have identified the headaches. If you are going to be "in the business", get the FFL, and do it right.

  3. NwGun

    NwGun New Member

    You are a a manufacturer. Register as one.
    What is your worry about it being home based?
    If they want in there, they will get a warrant and enter anyways no matter where your business is.
    Out here the ATF guys have been great to me. Never a problem, and always wiling to answer my questions and help me where they can when I have an issue with determining a meaning behind a rule or law.
    Just follow every letter of the law, and when you are not understanding the intent of a law or its actual meaning, just call them and get a determination from them. just be sure to get a name and an ID number and record the day, date, and time of your call.
    Just CYA, and it's pretty easy having and maintaining the FFL and the records.
  4. cappaletti

    cappaletti New Member

    I have had absolutely nothing but HELP from the ATF folks here in NC. The agent that came to interview me after I applied was just a great guy. And he knew what he was doing/talking about ! The ATF isn't as bad as everyone thinks (of course it depends on the individual)..but for my part they have all been great..if u have any questions prior to applying call ur regional office and speak to an agent..not just whoever answers the phone..and they'll help you far as the license is concerned..go for it! I'm not sure if u need a manufacturer license or just a standard license..ask ATF...
  5. sigp250

    sigp250 New Member

    Everything that has been said about the BATFE Industry Operations agents is true. They are usually more than willing to help. There are no gray areas though. Either your business conforms or it does not. I'm an 01-FFL dealer. Most gun smiths are 01 but can be 07 if they choose. If you actually intend to manufacture firearms than you probably want an 07. If you are repairing, restoring, refinishing as a gun smith and dealer then an 01-FFL is probably best.

    How you run your business from an accounting standpoint is up to you. I use Quick-books Premier. I download to my accountant once a month and meet with him quarterly before filing sales tax. I am set up as an LLC with more than one member so at the end of the year I file form 1065, the same as a partnership would.

    Setting up accounting for a retail business is not difficult but it is different than other businesses. You have inventory to keep track of for one thing.

    Where you conduct business from is were your FFL is issued to. With the exception of gun shows, all over the counter business must be conducted from where your licenses is issued to. If you were to maintain multiple places of business, each would need a separate FFL and each would need to be in conformance with zoning, landlord if you rent office or retail space, approval of CLEO and any other local and State laws. Each place of business would need business hours of operation.

    Exceptions are that ATF allows off site storage without a separate license. Also a gun smith may make immediate repairs at locations other than his of place of business. Immediate usually means less than one day. If a gunsmith takes in a gun for more than one day it must be recorded in the bound book as an acquisition and the disposition recorded when the fire arm is sold or traded.
    Last edited: Sep 29, 2010
  6. cappaletti

    cappaletti New Member

    It's very evident to me that sigp250 has definitely got his information correct...I do think that ur making a mtn out of a mole hill..just call ATF..they'll tell u what u need to do and how to go about doing it...
  7. sigp250

    sigp250 New Member



    Thank you.
    The Op's question was posted quite a while ago. In re-reading it though, it occurs to me that he may already be in violation of the GCA.

    (A5) Does the GCA control the sale
    of firearms parts?

    No, except that frames or receivers of firearms are "firearms" as defined in
    the law and subject to the same controls as complete firearms. Silencer
    parts are also firearms under the GCA, as well as under the National
    Firearms Act (NFA). Certain machine gun parts, such as conversion
    parts or kits, are also subject to the NFA.
    [18 U.S.C. 921(a)(3) and (24), 26 U.S.C. 5845, 27 CFR 478.11 and 479.11]

    (A6) Does the GCA prohibit anyone
    from making a handgun, shotgun
    or rifle?

    With certain exceptions a firearm may be made by a nonlicensee provided
    it is not for sale
    and the maker is not prohibited from possessing
    firearms. However, a person is prohibited from assembling a nonsporting
    semi-automatic rifle or nonsporting shotgun from imported parts. In addition,
    the making of an NFA firearm requires a tax payment and approval
    by ATF. An application to make a machine gun will not be approved
    unless documentation is submitted showing that the firearm is being
    made for a Federal or State agency.
    [18 U.S.C. 922(o) and (r), 26 U.S.C. 5822, 27 CFR 478.39, 479.62 and 479.105]

    What applies to licensed manufacturers or gun smiths applies equally to a nonlicensee by Federal law. The OP should apply for an 07-FFL.
  8. cappaletti

    cappaletti New Member

    I concur wholeheartedly...