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I would like to start manufacturing silencers for sale. Hopefully, I have read the ATF information correctly. I will need to be licensed as a Type 7 FFL. Presently I have made several silencers and SBR's on a Form 1. Transferred silencer's on a Form 4. All of which have been approved thru a "NFA Trust". My question. When applying for the FFL, would it better to apply utilizing my present NFA Trust, a newly developed trust, or my personal name as the sole proprietor of the business?
Apply as an individual/sole proprietor, or form an LLC or other type of corporation.
Not only will you need to be an FFL 07, but you will also need to pay the class "2" SOT ($500/yr if you're < $500,000 gross revenue).
Now is a good time to apply for your FFL as by the time it arrives (60-90 days from mailing the application) you'll be right at SOT renewal time (June). The SOT is not prorated, so you'll want to pay it as close to June as possible to maximize the value of the tax paid.
>>form an LLC or other type of corporation.
Look into what yearly paperwork is required in your state. Some states(Arizona) do not require annual "LLC" reporting but Corps. do and some have fees. We (FFL 07/02) have enough paperwork already.
Jerry
FFL 07/02
Remember that if you form a corporation for purposes of applying for your FFL then you cannot keep any "Pre-May" machine guns if and when you wind up the business and let your FFL go. If you apply for your FFL as a sole proprietor, you can keep your Pre-May stuff once you quit the business (although it cannot pass to your heirs and will have to be disposed of by your personal representative when your estate is being distributed).
CitizenClark, since you mention the purchase of a "Pre-May" machine gun. If I were to build a machine gun from a parts kit, I understand I can only sell that machine gun to another FFL 07/02. Is this correct?
Or military or LE agency...