I want to get my FFL. What are the specifics on dual FFLs for one business?

[El Rojo]

OK, here is the skinny. Location Kern County, California (aka conservative stronghold). A guy has another business and he wants to get his FFL because he has a separate shop and space and our local FFL just moved to Wyoming. As soon as our local FFL left, I wanted to take his spot, but didn't have a business location to do this as city code says no FFLs at home. My idea is to only order guns that people order. We are talking low overhead, not even really a full functioning shop.

So this guy is going to do this, but he is still running his other business too. I tell him I wanted to do it too. I have firearms knowledge, I have great organizational and paperwork skills, and I am motivated. Lets make this happen.

So my question is this. If he has the business license and the facilities, can I get a FFL in my name for his business and his business address and operate in some capacity with him? I looked on the BATFE's website and the link for dual licenses in the FAQ Section was a dead link.

Also as a side note, I looked all of this up a few months ago, but since I couldn't find a shop to run a business out of, I was giving up. So what do you need for your FFL business?

FFL
CA DOJ Certificate of Eligibility
Business License
Board of Equalization
Letter to Chief LEO

What else am I forgeting.

Thanks for your help.

 

[El Rojo]

I called the ATF today in Los Angeles and they said that I have lots of options. First, just one of us could get our FFL if we wanted to. Then the one without the FFL could just be an employee and they can conduct all of the checks and transactions under the FFL holders name. The next option is to make the non-holder a responsible person in which case they can order guns and basically run the business just like the FFL holder can. The helpful lady also said I could get a dual FFL and we could both have one if I wanted to. I asked if she would prefer that since they would get more money and she said, "I suppose since it would help pay my salary, but in all honesty, that is just one more file I have to take care of so really no." She didn't sound like a jack booted thug and was quite helpful and polite.

So ask a question, answer it yourself I guess.

 

[Sam]

The regulatory folks aren't the JBT's. Mine is somebody's grandmother, looks like it and is pretty helpful.


I would reccomend that you form an LLC together and get the liscense in that name.
Easier for taxes all the way around and since you are owners and not employees you don't have to do witholding. Since it is a 'corporate' ,things will be easier when you decide to get a class 07 and become SOT's.

Sam

 

[Hkmp5sd]

Liability Insurance, Tax Number and storage facilities that meet the .gov requirements..

 

[logical]

If it is going to really be your gun business and not the other guys...get the FFL in your name, formally rent part of his facility and get a business license. The taxes will get really messy if he is the FFL and you are an employee.

More importantly is what happens if he decides he doesn't like you, or dies, or the gun sales really pick up and you want to get a building of your own. You could be out in the cold unless you have the FFL.

 

[El Rojo]

It is on! The FFL will be in my name and he will be listed as a responsible party, which means his name won't be on the FFL, but he can contact the ATF as a responsible party should he have to. By keeping him off this FFL, my hassle with the PRK DOJ will be minimized since I already have my COE. The business license and everything else will be in both of our names. He is pretty much going to front most of the costs on the facilities, but since he already has a business there, it is minimal. We will split the profits 50/50. So initially I get the better deal, but long term I will be doing most of the work and we will split the profits in half. No big deal to me.

I am filing a ficticious business permit under the name Ten Percent Firearms. Our basic plan is to not carry much of anything in stock. Smart people can mail order and buy ammo and accessories cheaper than they can get them at the local gun store. What they can't do is buy firearms. So we charge gun price + ten percent + shipping + dros + tax. I called one of our local gun shops and a Glock 23 started at $575 and after their dros and tax it was $643. Figuring that I can get a Glock as a FFL for around $450 + 10% + shipping $20 (will be less if I make multiple customer orders) + dros $20 + tax $35 that comes out to $565. Anyone here willing to pay $80 less for a handgun?

This thing is going to work! The only real hold up right now is waiting for the zoning guy to call me back, which has me a little scared only because local government types have a lot of power and too much knowledge of their power. I know it will clear zoning, but you never know with the locals.

So Kern County residents, get ready to have a cheap place to get your guns. I might have to offer a THR free shipping discount! I will keep you all updated.

 

[El Rojo]

Update: The ATF came by today and did our initial inspection. Piece of cake. However, his very ominous sounding, "Good luck" made me think I have a lot of paper work and hassle coming my way in the form of the State of California.

So it looks like t-minus one month or less for the FFL to show up. Also if you are going to have a partner that contributes money, he/she has to be listed as a partner on the FFL or they will consider it invalid when they figure out you have a partner. So my partner now has his name on the license. We also applied for his COE ASAP so that shouldn't be an issue.

So after the FFL shows up, I need to start sending signed copies to everyone (or fax, thank you very much ATF!) and get my paperwork completed with the state. I spent the evening learning how to use Quickbooks and I am looking forward to using it.

This whole thing is going to work off of word of mouth, so anyone in the Kern County area who wants guns lower than you can get them at the big dealers, let me know.

 

[artherd]

You go dude!

Congratulations. I do have one suggestion, INCORPORATE! For the liability shield, tax issues, lic issues, and it will be easier to become a class III dealer to LE Don't bother with an LLC, do a full subchapter C CORPORATION.

Now you need to get your manufactuar's FFL as well and start producing some designs!

 

[El Rojo]

How hard is it to incorporate? Doesn't that cost some change? If it costs a few thousand to incorporate, we will be waiting a year or two to do that.

Manufacturing would be nice. My first design would be none other than the .50 FUCA round!

 

[roo_ster]

In the state of Texas, it cost my wife ~$300 to set up an S-corp.

BTW, a sole proprietorship is just plain in-freaking-sane. Incorporate. C or S, depending on what makes sense for you.

 

[Henry Bowman]

You want/need the asset protection of an LLC or corporation. It is worth the paperwork. You can create a Nevada corp (popular for tax reasons) for about $500. Probably same in California.

 

[Silver Bullet]

I spent the evening learning how to use Quickbooks and I am looking forward to using it.

I'm not speaking with much authority here, but if you don't have any background in bookkeeping or accounting, you may want to hire a CPA to set up the books initially, just to make sure you're going in the right direction.

I could easily be wrong, but I've seen some things that made me think this might be a good idea. There are probably accountants here who could say with much more authority.

 

[pbhome71]

Quickbook is great for a small business. We used it when we were a start-up, until we have around 60 folks, but we have our own CPA.

IMHO, in the beginning, you NEED a CPA to go through to make sure the book is good and for TAXES.

Good Luck El Rojo. I wish I live near by you.


-Pasvorn

 

[Kjervin]

As a practical matter, it is always a good idea to have an ongoing relationship with a CPA (and a lawyer too for that matter). Even if it is too expensive to have them do the work for you, you can usually get them to look over what you have done periodically. As well as the fact that if they have a lot of small business clients, they might be able to give you some good advice that will save you money or avoid pitfalls. Besides, it shouldn't cost much if anything to get someone to come over and tell you what they can do for you, right.

Kj

ps- Don't go for Price Waterhouse right away; think small to midsize and local or regional versus large and national. If you still are in touch of the last guy, find out who he thought was good. Experience with gun shops is good, expierience with retail is also good. Experience with small businesses is mandatory, as all CPA's don't specialize in all areas. Good Luck! ! !

 

[El Rojo]

My partner runs a recycling business and they have a "books" person. I will probably have them check us out once we get started and help us correct anything as we go.

Anyone know any good sources for what I can and can't deduct? That is where I want to learn more.

 

[AZRickD]

Nice that you are pricing the product so low... but remember, you have to make this worth your while or you won't stay in business. Another gun shop that closes up doesn't do anyone any good.

Besides guns, make sure you have lots of useful and low-priced impulse buy items like cleaning supplies, ammo, mags, etc.

Sales from these add up and keep you in business and your customers happy and coming back because they know that you have stuff they need.

Rick

 

[Moondoggie]

Consulting with a CPA is a good idea. Any of your local CPA's will know all the scoop on Fed, State, & local tax requirements..probably a few exist that you've never heard of. Depending on your biz volume and how it's sructured you may be required to pay into fed & state unemployment, worker's comp, sales taxes. The CPA can help you keep it as simple as possible.

My wife and I set up our S-Type corp in 99 for $500.

 

[El Rojo]

Nice that you are pricing the product so low... but remember, you have to make this worth your while or you won't stay in business. Another gun shop that closes up doesn't do anyone any good.

Besides guns, make sure you have lots of useful and low-priced impulse buy items like cleaning supplies, ammo, mags, etc.

Sales from these add up and keep you in business and your customers happy and coming back because they know that you have stuff they need.

I have a different philosophy Rick. It is having all of that overhead of inventory and what not that drives my prices up, which makes me like all of the other gun shops, which decreases my customer volume and eventually drives me out of business. By keeping my costs low, I can offer my goods cheaper and have more volume of business. True the impulse buy is good and as we go along we will see about catering to that. However, lets face it, they can go impulse buy elsewhere. What they have to do through me is buy guns that need a 4473 and 10 day wait. If they can do that for me for 10% or more less than the other guy, who are they going to go to? If in the process they can order some bulk ammo or something else and save money while I make money, lets do it. I know I am not going to get rich with this business. What I am going to do is make it cheaper for people to buy guns and make a few bucks doing it. That is worth my while.