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We are noticing a new business trend that many clients are taking advantage of. First, they form an LLC and THEN they apply for their FFL (Federal Firearms License) with the ATF.
This generally allows you to operate a home business or store in the business of servicing, manufacturing, importing, and selling of firearms. This FFL license application business idea is becoming more and more popular.
Here are some tips we've learned from our clients.
If you are planning on applying for a federal firearms license with the ATF, you may wish to consider forming an LLC first. Why? The ATF is typically more inclined to approve your application if you apply as a business and not as an individual.
An FFL can allow you to purchase, sell, and even manufacture handguns for a profit, among other things, depending on your specific license. Because the Federal Firearms License allows you to take these actions, the ATF wants to know that this is your business and not just a hobby.
The ATF typically will not approve this license for a person just looking to buy firearms for his personal collection. They are looking for you to run this as a business for the purpose of making a profit.
Your LLC will have many other benefits as well when it comes to your Federal Firearms License. Many wholesalers would rather do business with another company than an individual. Creating a good relationship with wholesalers can be a great start in getting your business off of the ground.
On top of that, your LLC’s expenses, as well as the other costs involved in getting your FFL can be deducted. Speak with your tax professional on the specifics of exactly how your LLC can be a tax benefit for your Federal Firearms License as a business.
Another reason to form an LLC is for liability purposes. Clients form LLCs every day in order to separate their business activities from their personal assets. This is an important consideration, especially with the potentially dangerous nature of the products you are selling and receiving.
Clients typically do not use their personal name when filing an LLC for the Federal Firearms License for privacy reasons. For example, John Smith LLC, tells everyone that John Smith is most likely the owner of John Smith, LLC. This just takes away some of the privacy and security that your LLC can provide.
Some clients have used RocketFFL for assistance in obtaining their FFL. RocketFFL offers a service to walk you through the process, and explains the reasons behind each step. When it comes to the legal requirements of selling weapons, the rules are constantly changing. A good thing about RocketFFL is when you use their service, you will be updated if/when things change in the future. To learn more, visit https://rocketffl.com/.
For more information and help in forming your LLC, contact Harvard Business Services, Inc by phone (800-345-2677), email, or live chat. We have representatives that form companies every day, all day, and are happy to answer your questions. We can form an LLC for you in any state you choose, and can also give you the advantages of one state over another.
If you'd rather form your LLC online, please visit our easy-to-use LLC order form.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.