LLC or INC paperwork for starting FFL

[wig]

I am in the process of starting up an FFL and importer business, mainly LEO sales. Do any of you wise people have pointers on sites with specific language for the articles of incorporation (or their LLC equivalents?).

The FFL process is pretty straight forward, but I want to ensure that the corporate paperwork is solid as well. The words are pretty common, so searching has been a bear!

Thanks all in advance!

 

[Bartholomew Roberts]

If you plan on starting an actual business, especially one with potential liability like an FFL, I would go see a lawyer. It will cost you money; but it will be set up to meet your needs instead of being a legal form that may or may not protect you when you really need it.

I don't know what the market is like where you are; but here for a fairly straughtforward LLC with a single managing member, you can have a lawyer draw up the papers, create the minute books, file and handle all the details for about $1,800.

That may not sound like a great deal right now; but 10 years down the road when you have a problem come up and it is already addressed in your bylaws and certificate of formation, you will be really happy with the money you aren't spending on litigation (for comparison, just hiring a lawyer and having them depose a single witness is going to cost way more than $1,800 even if he can shut it down immediately).

 

[lanternlad1]

You do not need a lawyer to set up an LLC or INC. You can do the paperwork yourself for free and pay only the state fee ($400.00 in TX). I've had one for years (LLC) with no problem. If you make a mistake on your paperwork, the state will kick it back and refund your money. Consulting an attorney is fine, but isn't really necessary. Most do it for a 'feel good' feeling that the lawyer is taking care of their interest, which is not necessarily true. Most business laws are written in plain english (not like criminal code) and are easy enough to follow. I would suggest to get an LLC and business premises before you get your FFL, or else you open up your home to BATFE inspections.

 

[Lichter]

Find a good lawyer and have them customize an LLC for you, by doing it right and choosing the most advantageous tax status (s-corp or c-corp), you'll save and money and a headache down the road

 

[Bartholomew Roberts]

You do not need a lawyer to set up an LLC or INC. You can do the paperwork yourself for free and pay only the state fee ($400.00 in TX).

If you are the sole shareholder of the LLC or corporation AND you are not concerned about the liability protection/having the corporate veil pierced AND you will always be the sole shareholder - then laternlad is probably right (at least in Texas) that you can file yourself without problems (the TX state filing fee for LLCs is only $300 these days by the way).

However, all states have different statutes regarding corporations and what works in Texas may not work where you live. Also it is important to understand that the Certificate of Formation and Bylaws are effectively the "constitution" and "statutes" that govern how your company is run. If you have more than one member, there are a lot of issues to consider that are absolutely critical. Even if you have only one member, it is worth having a lawyer just to discuss the different ways you can lose the liability protection the corporation offers.

Ultimately it is your decision; but people who think they can avoid the expense of paying a lawyer on the front end often end up paying a lot more on the back end.

 

[wig]

Should've been more clear...

A) my partner is an attorney and B) we are hiring outside counsel to setup the firm so there is no conflict.

The LLC is a foregone conclusion as a partnership sub-type. However, my partner and our counsel are not versed in the intricacies of FFL law - so, that's the reason for the request.

I'm looking for cites or directions that they can research (and earn their law degrees! ) so as to make life more efficient.

Hope this helps and gets it back on track for me. Thanks everyone for chiming in, in any event!

BR is spot on - the pierced veil concept completely dissolves any "force field" applied by the magical and mythical C/S/LLC. In order to avoid the consequences of the piercing, a business must be totally separate from personal assets, and have absolutely not a hint of tie into the personal life (i.e. forming an LLC to save on taxes so that you can write off that plasma you just bought - you know, the one that is a presentation device in conference room L).

Furthermore, most liability protection to be had by forming a proper company is in the business/financial side. The main reason for this thread is to dig deeper - what are the other implications and are there any clauses to be had in the articles/formation that help protect this entity and ultimately ourselves?

Lastly - there is no retail inventory to speak of in this business model. As stated above, primary sales will be LEO/LEA and the remainder will be imports - my partner's specialty is imp/exp. And hopefully, we'll be able to offer these services to our community, THR especially, within the next six months.

Cheers.

 

[Car Knocker]

I'm looking for cites or directions that they can research (and earn their law degrees! ) so as to make life more efficient.

Perhaps it would be more efficient if you included the state this business will be incorporated in? A THR member citing Texas law probably won't do you much good if you're in Nebraska.

 

[wig]

LOL - good point. This is in IL.

 

[MAKster]

One firearms specific aspect that might become an issue regarding an LLC organization agreement or corporate by-laws would be who actually is the FFL. If the FFL is in an individual owner's name and he dies or is bared from firearm possession because of a felony conviction there has to be a written process for transfering ownership to another person who could apply to be a FFL. Also you might want to have a provision that says an owner cannot sell his ownership interest to someone who is barred from possessing a firearm.

 

[wig]

MAKster... (and others for posterity reasons)

The FFL can be filed on behalf of the corporation or LLC. If that is the case, all managing partners, officers of the corporation or managing members (depending on the organization) must pass legal requirements as if they were individuals. The form allows for up to 5 people in one shot.

FWIW - we filed it all. Have the business registered, state license, FEIN and filed the FFL paperwork. Now the wait begins.

In the documentation for the LLC, we put in a clause that the firm's primary business is in the lawful sales of weapons as classified by the US BATFE. (I'm paraphrasing - as I don't have the text handy).

Wish us luck - and we'll announce the business soon - hopefully to everyone's benefit.

Cheers.

 

[lawdogso]

Look at Legalzoom.com
They are fast and cheap!!!

 

[Zak Smith]

The co-owners of our corporation filed for a Type 7 FFL in June 2007. It took almost 6 months to the day to get the FFL issued.