Hi guys, can someone educate me here regarding the legalities of running a gun sales shop?

There's no local gunshop around where I live, and I've been toying with this idea on and off for a while but I don't know if it is workable legally-

There's a few businesses that sell ammunition around here, could I lease some counter space theoretically and have a few shotguns and stuff, and the store owner show people guns and take deposits on guns? Since there is a waiting period on everything around here, I'd be able to go over paperwork before they took posession so the clerk wouldn't have to be the official seller or anything.

Mainly I'd be doing it to import some higher end stuff but that would be for a different clientelle, I'm just thinking I could also help out the local market but I don't see that business being anything more than spotty. I'd rather not be stuck behind a counter, but having a counter to use would be helpful on occasion. I don't want to take in any repairs, just some occasional sales.

Does this explanation make sense, and if it does would this be an acceptable agreement in the eyes of the BATF?

Thanks,

Mark

I don't know what the laws and regulations are between 2 rivers, middle USA, so you would have to consult your particular states laws and regulations. You need to be fully licensed with the Federal Gov't (FFL) and be in compliance with your state and local laws pertaining to operating a gun buisness. I believe your employees would have to undergo background checks as well to handle gun sales.

If you want to know if your plans for a gun business would be acceptable with BATFE, you would have to ask them directly.

Mark, I just recently looked into this and found a few interesting changes to the laws. I will write more about them this afternoon, but the one thing that needs very little explanation is that the feds are very unwilling to issue a FFL to anyone who doesn't have a store front open to the public.

Joe

I agree Joe, and that is one reason why I'm considering doing it this way, so there is an actual storefront that holds regular business hours.

I'll look into state laws later, however my experience with business concerns is that if it is OK with the feds it is usually OK with the state too as far as paying taxes making money.

My primary interest here is the import and sale of some higher end guns, but one of those every month or two will not pay the expenses, nor do I want to sit behind a counter, which is why I'm considering doing it this way.

http://www.atf.gov/firearms/faq/faq2.htm#c1

Just to get you started, begin here with the BATF. Be aware too, that there is a ton of "How to get your FFL" kits out there for sale. Sometime ago, a BATF called me at home re. my inquiry for a FFL application....that was enough to discourage me as I did not meet the public availability and hours requirement......good luck. r in s.

I'm aware of FFL regs.

What I'm specifically wondering about is the practicality of leasing a counter in a gun-friendly shop, keeping a few guns there, and if the shop owners can show people the guns and possibly take a deposit without me personally being there to do any of that. If a deposit is taken I can go do all the paperwork, etc. I'm planning on keeping a gunsafe in a back room where the guns would get locked up at night.

I'm just wondering if someone here has experience with this sort of arrangement.

Mark,

I used to deal with a gun shop in Pennsylvania in a very popular sporting clays area. The shop was large and there was a high end shotgun room that was only open at certain times. The counter was leased to a firm that dealt in Krieghoff, Perazzi, and the better browning shotguns. There were Some very expensive Beretta shotguns and the like as well. The shotgun room was open on weekends and by appointment on week day nights. This lasted for three years before the popularity of the sport faded to the point of no profitability left in having the room open. It was also the start of the archery boom, and the shop replaced the shotgun room with a huge archery section complete with two tournament archers working there. I was very good friends with the guy who leased the room for the shotguns and he always made it a point to tell me how much money he made while it was in place. The owner of the shop loved it because he had a deal with the shotgun room lessee to handle all ammo and accessory sales. Was a profitable deal for both parties and would have last if my friend would have been open to embracing more trends or expanding his business into a new market. I can only imagine what kind of revenue you could offer to a shop if several clients per year come there to buy something like a Chapius double rifle or something of that order. A few boxes of 470 Nitro at the retail level is a good days work.

Joe

I should add that the shop carried a full line of firearms, but they were geared toward the Pennsylvania deer hunter and the occasional small game hunter. there was hardly a gun on the rack over $600.00. The high end shotgun shop was an excellent compliment to the store over all. It was a very posch room, Red carpet and expensive hardwood cabinets. Very much the Cabela's gun rooms , only smaller. The lessee of the shop even insisted on incandescent lighting for his room because he thought florescent light ruined the warmth of fine walnut.

Joe

That's a pretty gray area you are talking about; dark gray at that. I'm pretty sure that all guns entering an FFL licensed establishment must log those arms into their log books. It wouldn't be much different than a dealer taking a gun on consignment which also must be logged in and logged out when sold along with all appropriate paper work and back ground checks, when it is sold. I serously doubt that an FFL licensee can have a non-logged firearm on the premesis beyond more than a few hours for, say mounting a scope or some such. "You" will not be allowed to handle any "paper work". And yes, the store will be considered the seller, not you. Even on a consignment gun, the store is still the seller, not the owner of the consignment gun. The store owner is just getting an agreed upon profit for handling the sale. If your local store is only selling ammo, they may not even be set up to record firearms transactions. In fact they may not even have a type 01 license, at all, if they NEVER sell firearms. If they do not now keep logs (no logs required by the Feds on ammo sales) they will have to start. If they do not have a type 01, it's a dead duck.

quote:

Originally posted by NFMike:
That's a pretty gray area you are talking about; dark gray at that. I'm pretty sure that all guns entering an FFL licensed establishment must log those arms into their log books. It wouldn't be much different than a dealer taking a gun on consignment which also must be logged in and logged out when sold along with all appropriate paper work and back ground checks, when it is sold. I serously doubt that an FFL licensee can have a non-logged firearm on the premesis beyond more than a few hours for, say mounting a scope or some such. "You" will not be allowed to handle any "paper work". And yes, the store will be considered the seller, not you. Even on a consignment gun, the store is still the seller, not the owner of the consignment gun. The store owner is just getting an agreed upon profit for handling the sale. If your local store is only selling ammo, they may not even be set up to record firearms transactions. In fact they may not even have a type 01 license, at all, if they NEVER sell firearms. If they do not now keep logs (no logs required by the Feds on ammo sales) they will have to start. If they do not have a type 01, it's a dead duck.

Mike,

Where do you think the gray areas are?

This is why I am asking here, but seeing as:

1) The FFL would be in my name

2) Any guns purchased would be paid to my business, not the store owners.

Where have I said that I would be taking anything in? I specifically even mentioned that I would not be doing gun repairs.

I am just asking if I have the FFL, and a separate business license could the normal store owners show people guns and take a deposit, heck maybe even run the background check. If they get the deposit for a gun, I'd come in and do all the paperwork and be there to hand the gun over the next day.

I suppose for the purpose of the transaction the store clerk would be my employee.

Sorry, I didn't gather from your first post that you were obtaining an 01 license. But you will still have hurdles to jump. To get the 01 you will have to state a "fixed" place of business on the license. If a business moves to another address, it would have to go through the paper work process to get the address changed. Depending on how knuckle head your local Fed agents are, they could even require a whole new license application (6+ months). So you would basically have to make the address of record as the shop you would be displaying from. So if you are thinking about using the "base" address on the license as your home and selling out of one shop or another, you better have a long conversation with the local agents. The whole point of the address specific license is so they can find you, your firearms, and inspect your operation and records. I don't know of anywhere that will allow you to have a license at one address and sell out of another. Now I don't think there is anything specific that says that two license holders can't be at the same address but that is something that you would have to work out with the shop owner. And yes, if a shop employee can get to your firearms and show them to a customer, the Feds WILL consider them an employee of yours and will have to abide by all regulations of being such. Also, the shop will have to pass (if they don't already)inspection as far as all the safe guards that are required (bars over windows, alarm system, etc) of a type 01 license. I doubt that your locked safe on their premisis would suffice to pass the "safe guard" regulations. You need to get one of the license application booklets and see what all is required. They have made it a daunting process on purpose.

I don't believe what your asking to do can be done !. YOU must have the store !. Leased or owned or what ever paper work must show you as the OWNER of said store !.

Even FFL. Transfer dealers who may or may not sell guns out of their stores must have the store .
All must comply with a Commercial Store front open to the public , but don't have to sell fire arms . They could sell accessories Ammo Hunting fishing gear but are NOT required to Retail fire arms .

They how ever can order or have customers order Via the internet . Then have those weapons shipped too " Their Store " . Then do Legal Transfers out of their stores and they charge the appropriate fees for doing so .

I just went over this " Totally " last week with a BATFE Licensing Field agent .

Some and most States laws vary but These are Federal requirements for ALL states . According to the BATFE Agent . I got copy's of all the regulations pertaining to Federal requirements .

In Calif. There are NO MORE Home FFL. Holders Period !. Even those who work on firearms must be licensed ( If they're on our Hit list or assault weapons list ). Those are how ever State Laws and Not Federal . Hope this helps .

Mark, Don't let this get complicated. Leasing counterspace is no different than leasing a building, lots of gunshops do that. As long as the address on the FFL is the address of the shop, the ATF won't care.

I've had friends who either have an FFL. or O1 license or had them up until a few years back .

Some went and got commercial buildings and went into the Firearms business . Two guys I know operate out of the same building and both have their own FFL. . ALL their transactions must be separated and documented as such .Even though it's a single business name . Because they both have their own FFL. is why .



Case in point . My friend leased space from another friend who had a commercial building , of another type of business . Set up everything including window bars dead bolts Alarm Safe Etc. .
He simply conducted business when the other business was closed . This was OK back then .

Not any more . He either had to lease a complete building or buy one in order to maintain his FFL. He moved out of State !; only to find out He still needed to comply with having his OWN commercial building zoned for that use or use permit zoned .

Check that point REAL Carefully !.

I came to the conclusion for my own purposes . IT's NOT WORTH the hassles !.

I purchase what ever I chose to , Via the internet sales or Gun Broker or whom ever . Then pay for it. I then have it shipped too my FFL. transfer dealer . I pay his and the Fed , State paper fee or DROS cost .

Wait until I clear back ground checks , pick up my weapons .

Waiting period on long guns begins when YOU purchase the Item and fill out the Transfer paper work !.
Not when the Transfer Dealer has it !. So do it early if there is shipping time involved . It works out Slick !.

Pistols are different SN must accompany paper work with those . Where long guns are just that . Rifle or Shotgun they just say Long Gun no distinction no SN necessary !.


See I used to purchase through gun dealers , NOT any more . Least wise where I live .

First they SPANK YOU by full retail pricing !.Never stock anything !. Then they take their sweet ass time ordering it and could care less about you or the Item you've purchased !. Or worse is the BIG CHAIN stores which sells you what Corporate purchases or sorry can't help you !. Order What ? . I don't think we carry that brand or I can't get those their on back order !.

It never used to be that way here . A Real GOOD person was behind that counter , A friend and GunSmith which helped you make correct decisions . Had or access to add ons or just about anything you wished to have done or answered .
I never complained once about the prices they charged . They needed money it was their business and I paid for the privilege of their knowledge and friendship . It was worth every nickel !.
God I miss those days !!!!!!!!.



Shoot Straight Know Your Target . ...

With all due respect K, your overthinking this whole thing. When the ATF did my primary inspection, they didn't ask about building ownership or security. I build custom guns and manufacture parts for several parts distributors, I therefore have several FFL's. The ATF has been to my shop a couple of times and they don't give a flip about my "security system", or me or my employees working arrangements. They care about your books. BTW my security system is a lock on the front door and a blue heeler dog that thinks the shop is his.

We can each speak only of our own experiences. I have no doubt in what DrK says of his. I also have no doubt of Sooner's. A lot of how they inforce "the rules" depends on where you live. What you can get away with in the "fly over" country you will never get away with on the east or left coast. Both those areas will even check premises for a type 06. Hell, I've never even spoke to an agent, let alone seen a live one. They know who I am, where I'm at, and what I do, and they don't care. I don't know of a single smith that has a type 01 that DOESN'T work out of his residence, and most of those have never been "inspected". The Federal rules are the same over the entire country but they are applied differently, depending on the acceptance of "gun culture" in that region.

Don't forget the fingerprint cards, the photos of everyone involved in the business, AND the complete map and floorplan of your business, including the storage locations for your guns. And, if your business also has your HOME co-located, guess what?

Good luck in your endeavors. Maybe in the future, some of the damage done by the Clinton administration can be undone.

Everyone be warned- if this thread gets one more "clinton administration did this" or "bush administration did that" I'm moving it to the political forum.

I'll rephrase my question once more-

Is it possible for me to lease counter space in a gun-friendly store that already sells ammunition, have a rack with some guns on it, and when I'm not there (which will be most of the time) the regular store owner can show guns to customers and take a deposit?

There will be 2 separate businesses here, the store and the FFL. Money would be paid to the FFL business and the store owner get a commission, in addition to the leased counter space.

That's really all I want to know. Alarms, where the guns will be locked up, building floorplans, etc etc I will deal with when I start the application process, I just want to know if this is legally feasible to do what I am asking.

Joe and Sooner, thanks for your replies.


Mark

Unless the agent for your specific area is a member of AR and he chimes in here, you will never get a definative answer. Only he can amswer your question. Local laws and regulations on commerce in firearms are in addition to any federal regulations so each district is different than any other district.

Although you never say, I presume that the "store" does not have any sort of FFL (you do not need a FFL license to sell ammo). That would compound your problem greatly. If you were there 100% of the time the firearms were open for display, you might have better luck. Other people, not in your direct employ, having access to the firearms is going to give them shivers and chilblains.

Again, only the agent for your district can answer your question. My guess is that 99% of them will say no.

quote:

Is it possible for me to lease counter space in a gun-friendly store that already sells ammunition, have a rack with some guns on it, and when I'm not there (which will be most of the time) the regular store owner can show guns to customers and take a deposit?

Apologies for the thread hijack.

To answer your question, it is perfectly legal to do so.

However, the business where you lease space must meet some strict guidelines:

1. For purposes of selling firearms, you need a Class 01 license as a dealer of firearms. The building/premises MUST meet the following criteria: It MUST be a storefront or other recognizeable place of business. It MUST have definite operating hours where it will be open to the public--"by appointment only" won't cut it.

2. If YOU are the primary license holder you must get the premises AND the owner of the business you are leasing space from on the FFL, unless you are leasing an entire part of the premises.

3. You MUST submit to BATFE the ATF Form 7, which is the application for license. You must include on the FFL application the names and data of everyone who will be doing business, selling firearms. These (along with FBI fingerprint cards, and passport photos of everyone on the license) must be submitted on your ATF Form 7.

4. Your application MUST also include the operating hours and a detailed description of where the guns will be kept, both during and after business hours, along with your security plans.

5. Once you have submitted your application, you WILL receive a visit from ATF Compliance prior to the license being issued--especially if it is your first business.

6. You MUST be prepared to fill out a plethora of paperwork for each firearm sold. The amounts and type can vary greatly depending on the number of guns sold, the types of guns sold, and your State laws. Specifically, the two forms you will be most familiar with is the ubiquitous Form 4473 (the format and content of which changes more than some folks change their underwear) and the bound book. The bound book is the permanent record of transactions that take place under your business name.

The 4473's must be maintainted for 20 years, the bound book, for life unless you go out of business. Then you send the whole mess in to ATF, where it gets archived.

I hope that this all helps!

I wish to confirm what Powderman had to say.

I believe he is most correct of the info you have recieved. This based on the conversations I had with our local agents, and licensing-branch last time we renewed our FFL, FEL (low explosives), and aquired our second FFL location (more on this later).

Much of the other information you recieved was correct until a year or two ago. Things are changing in West-VA (BATFE headquarters). There is a whole building complex devoted to revoking licenses that do not meet the new criteria. In my opinion this is do-able but don't expect to get it running soon, be prepared to spend long hours explaining the buisness relationship between you and the storefront owner. Hope that none of his employee's have criminal records since as powderman said they will also become your employee and you will be accountable for their actions.Don't expect to make much money at it, but will be good way for you to have easy access to "Toys".

To give you an idea of how silly things are getting. We have to have another FFL to cover our gunsmiths workshop address where his milling machines and lathes are set up, down the road 5 miles.

Sorry to take up so much space.

Mark, The only thing you need to have, above and beyond the application, is a letter from the owner stating that it is OK with him if you operate a firearm business on his property. That is all. My father and I farm here in Oklahoma. All our land is in our family trust with my father as head trustee. I bought my own farm and put it in the trust. Since I am not the head trustee, my father had to write a letter stating he didn't care if I had a gunshop. I could show the agent that I am the actual purchaser of the land but the actual owner had to write a letter. He didn't have to have a background check or even give his full name. What you are wanting to do is no problem. I have been through the application process twice, once for a retail license and once for a manufacturing licence. You are simply leasing a business location. As I said before I can probably point you to a dozen shops that lease space, the ATF doesn't care. You must have the stores address on the FFL, unless you get a seperate mailing address, and all business must be conducted there. If the owner of the store is the one that will run your business full time he will be listed on the application.

I fully agree with what Powderman said Also xm15e2m4. .

Except out in CA they will deny the license if one tries to do business out of an other persons store , Unless that store is an established Firearms business and meets security approval among other things . I will attempt to clarify .

I have known a few people who were doing business out of other persons stores unrelated to firearms or sporting goods , their license apps were denied or renewals refused !.

State or local ordinances not too close to Schools or residential areas , hospitals things like that . That has to do with some sort of local zone ordinances .

"The 4473's must be maintainted for 20 years, the bound book, for life unless you go out of business. Then you send the whole mess in to ATF, where it gets archived. "

The above statement is correct kept on Premises , they are not sent too anyone , unless one goes out of business ; then they are sent to a division of BATFE for archiving .

In CA State requires 3 years of maintaining records ; then they may be destroyed .

Things are much more stringent out here in CA than in other states . The BATFE requirements are the same , provided one meets certain State & Local conditions !.

Here is something I just called about to verify !.
Both of these guys are Cops and run an FFL business of a single name business . Their business is in an industrial park . They do how ever hold FFL's in each persons name , so Two FFL's on the same premises . The person doing the transaction MUST use HIS FFL . NOT the other persons !. Even though they are both listed on the business . They neither stock nor sell firearms !. They do legal transfers , but could sell firearms if they so chose . License is the same no difference .

I checked these facts twice .

Shoot Straight Know Your Target . ...