Getting and 01 & 06 FFL at home?

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Getting and 01 & 06 FFL at home?

Postby sublevel » Fri Mar 02, 2012 9:40 pm

Here goes the long list of details

First off Im a future lifetime NRA member and have my CHL and a 03 FFL already with super clean background and full support of the local law enforcement for whatever documents Id need signed, and a member of the local gun club

Im 30yrs old and live with my wife and 3yr old son in mineral wells, tx (Palo pinto county)

I already talked to the zoning office and running a home based business is ok (porvided you dont have high traffic and do not display signs - basically know one can know your home is a business) and if i read it right you can not have seperate door to you house for business or outside storage for business (I mentioned it was firearms related and that was ok as long ad the PD was ok with it)

Ive already registered a business name at the palo pinto county court house

also registered a domain name (same as business name)

Ive summited for my state sales tax id

Place of business is my home in the city limits a large 3 beroom mobile home (that I fully own, on my fathers rental land) with one room dedicated to my reloading equipment and "gun smithing" desk and closet as an ammo and gun rack / safe area (walk in front door, turn right and there is my "office")

#1 does anyone see a problem with this set up or have suggestions?

#2 will just having part time hours set on the form for the weekend hurt my chances?

#3 will having such a young child hurts my chances (all gun saftey is followed!)

#4 my goal is to be able to do transfers, work on guns for friends of friends, and sell parts through various accounts

#5 do you NEED to be a LLC for this?

#6 can I add other people to the FFL as needed (such as wife or my father?)

YES i intend to make money and NO this is not for personal firearms gain

06 FFL - guessing that is needed if I intend to reload and sell ammo?

ANY advice or guidence would be great, I have a lot of local support and I would like to see this through

Thanks in advance
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Re: Getting and 01 & 06 FFL at home?

Postby OldCannon » Fri Mar 02, 2012 10:16 pm

sublevel wrote:#1 does anyone see a problem with this set up or have suggestions?


Seems like you've taken care of everything you need to.
sublevel wrote:#2 will just having part time hours set on the form for the weekend hurt my chances?


I doubt it. My "official" hours are 5-8p M-F. The ATF was fine with that. You just have to have specific hours.

sublevel wrote:#3 will having such a young child hurts my chances (all gun saftey is followed!)


The ATF doesn't care about that.

sublevel wrote:#4 my goal is to be able to do transfers, work on guns for friends of friends, and sell parts through various accounts


ok, that's an 01 FFL.

sublevel wrote:#5 do you NEED to be a LLC for this?


If you operate as sole proprietorship, no, but I'd say invest the $200-$300 and make an LLC. Shields your personal property from liability issues, along with other benefits.

sublevel wrote:#6 can I add other people to the FFL as needed (such as wife or my father?)


Yes and no. There's no need to add people, you can designate people to do 4473s/A&D entries, it's just that you (or all the officers of the LLC, even if that's just you to begin with) are responsible for following the laws.

sublevel wrote:06 FFL - guessing that is needed if I intend to reload and sell ammo?


LOTS of liability issues here, and you'd most likely want to be an 07, in case you decide to make uppers, for instance. However, that smacks into ITAR issues as well (a multi-thousand dollar nightmare, annually).

My advice: Start as an 01 -- you can always "upgrade" easily later on, but unless you're going to seriously crank out ammo and have all the liability insurance behind it, I wouldn't do it. And I _definitely_ wouldn't do it unless you form an LLC.


sublevel wrote:Thanks in advance


You are most welcome :tiphat:
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Re: Getting and 01 & 06 FFL at home?

Postby sublevel » Fri Mar 02, 2012 11:28 pm

Thank you for your fast reply, I noticed your helpfulness on others questions, thanks

back to others handeling 4473 part, my normal day job hours are mon-thur 1p-1am im normally of fri-sun (I like to have 1 day off really) the wife works wed, late friday, all day saturday and sunday afternoon... my father take care of my mom full time until see passes (bad cancer, getting worse) and Id like the option of being flexible to FFL transfers and give my dad something to do after my mom passes (hes ex 22yrs airforce and clean record)

so could they in turn handle the business if needed while Im at work? or do they need to be listed on the application (they can all legally buy firearms)

Im not an LLC yet, but I am aware of the benefit of protection and will be discussing that soon...

I mainly want to do word of mouth sales (ie: can you get this? and how much? etc etc)

Now as far as ammo goes, Im far from public resale, I just dumped tons of money in equipment (Hornady LNL and LEE challanger breech lock, with Hornady setups for 15 calibers -5.7x28mm 50ae and 500sw were costing too much to play) but, in all legal wise, I have been asked to develope loads for caliber I don't have, and thought about a waiver of libality form...

The gun smoth portion: I have no clue how many ak and saiga questions I have answered, along with glock and ruger 10/22 custom stuff, and vaious stuff that needed to be replaced

You mentioned UPPERS... now when I built/had built my AR-15 at a gun show... I picked a lower, had some stuff changed, same with an upper... BUT! I had to place the UPPER AND LOWER togather, they WOULD NOT DO IT

So can I still order in lowers and uppers, process the lower sell them the upper and "gun smith" fit it IF they request help? (I know the 07 FFL would take that worry out)

I think Ill pause and wait for a reply now... thanks again
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Re: Getting and 01 & 06 FFL at home?

Postby sublevel » Fri Mar 02, 2012 11:32 pm

Oh yeah, and on the FFL form it asked if you ever held a FFL.. first time on the 03 FFL I said no... but with the new one do I say yes because I have a valid 03 FFL still? and then it ask to explain...

Im guessing ATF horror stories are just internet MYTH?
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Re: Getting and 01 & 06 FFL at home?

Postby apostate » Fri Mar 02, 2012 11:37 pm

sublevel wrote:You mentioned UPPERS... now when I built/had built my AR-15 at a gun show... I picked a lower, had some stuff changed, same with an upper... BUT! I had to place the UPPER AND LOWER togather, they WOULD NOT DO IT

If you become a dealer, make certain you understand what activities might trigger the FAET.
You better start swimming or you'll sink like a stone.
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Re: Getting and 01 & 06 FFL at home?

Postby OldCannon » Sat Mar 03, 2012 6:56 am

apostate wrote:
sublevel wrote:You mentioned UPPERS... now when I built/had built my AR-15 at a gun show... I picked a lower, had some stuff changed, same with an upper... BUT! I had to place the UPPER AND LOWER togather, they WOULD NOT DO IT

If you become a dealer, make certain you understand what activities might trigger the FAET.


Exactly. Having a customer purchase a lower and upper, even different brands, is the same as selling a rifle and WILL result in an 11% Federal Excise Tax that YOU must pay. If you don't pass that on to the purchaser at the time of sale, that's like giving them a free 11% discount (not that they'll complain :mrgreen: ). If the ATF thinks you're playing hanky-panky with those rules, you can be certain you will be raked over the coals. Moreover, if you're an 01 FFL, they can say you're "manufacturing" and aren't licensed for it, and bye-bye license.

I know there's a lot of FFL license types, but generally you're an 01 (sells/fixes guns), and 03 ("Cruffler" that sells antique guns), or an 07 (Manufacturer and _dealer_ of arms/ammunition). An 06 lets you manufacture, but not sell. I've never even heard of somebody being an 06. If you become an 07, you had better know your ITAR laws. It's a completely sucky and pointless way that the Department of State takes HUGE sums of money from you (ironically, we have to thank George W. Bush for that :grumble ).
I don't fear guns; I fear voters and politicians that fear guns.
The Old Cannon Armory is an FFL/SOT in the Austin area. We now carry FROGLUBE products
$20 transfers for current CHL holders, fire/police, and veterans, $30 for others, $50 for Class III items
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Re: Getting and 01 & 06 FFL at home?

Postby OldCannon » Sat Mar 03, 2012 7:23 am

sublevel wrote:Thank you for your fast reply, I noticed your helpfulness on others questions, thanks


Not a problem. When I was first working on getting my FFL, mrvmax on here helped me a TON. I'm just paying it forward ;-)

sublevel wrote:back to others handeling 4473 part, my normal day job hours are mon-thur 1p-1am im normally of fri-sun (I like to have 1 day off really) the wife works wed, late friday, all day saturday and sunday afternoon... my father take care of my mom full time until see passes (bad cancer, getting worse) and Id like the option of being flexible to FFL transfers and give my dad something to do after my mom passes (hes ex 22yrs airforce and clean record)

so could they in turn handle the business if needed while Im at work? or do they need to be listed on the application (they can all legally buy firearms)


My greatest condolences to you. My mother passed from cancer in '94, then my father in '05, then, sadly, my baby brother passed away here in my home about a year ago. He was the one that finally convinced me to get off my butt and get my FFL.

Back to your question: The real reason the ATF asks for hours is to set inspection dates/times. Just pick some consistent times for a few days a week and you're all set. You can operate beyond those hours. Run a 24x7 business for all they care, but if they call and set an inspection within the times you set in your application, you can't say, "Um, I'm not open on that day"


sublevel wrote:Now as far as ammo goes, Im far from public resale, I just dumped tons of money in equipment (Hornady LNL and LEE challanger breech lock, with Hornady setups for 15 calibers -5.7x28mm 50ae and 500sw were costing too much to play) but, in all legal wise, I have been asked to develope loads for caliber I don't have, and thought about a waiver of libality form...


One accidental double charge or a slow cooker and you could be in bad mojo. On the other hand, people DO have successful businesses that way, so I'll offer only one bit of advice: Get a lawyer. One that understands product liability. Also, most folks won't be too keen on signing a liability waiver when buying ammo. I've never heard of that, in fact. Also, don't forget that Federal Excise Tax applies to new ammo as well as ITAR fees.

sublevel wrote:The gun smoth portion: I have no clue how many ak and saiga questions I have answered, along with glock and ruger 10/22 custom stuff, and vaious stuff that needed to be replaced


That's awesome, actually. Don't worry too much about the "guns per month" question, I think they use that for traffic alerts. If you say you're moving 20 guns/mo and you move 2000, they're going to get suspicious.

sublevel wrote:So can I still order in lowers and uppers, process the lower sell them the upper and "gun smith" fit it IF they request help? (I know the 07 FFL would take that worry out)



As I said in another post -- you can't do that without hitting the buyer with 11% FAET. If the customer buys a lower from you one week, then buys an upper the next, that's different. However, if the ATF thinks you're doing that to avoid FAET, you're going to have a lot of explaining to do. Don't give them the impression you're dodging things, that will just make them dig deeper in an inspection.
I don't fear guns; I fear voters and politicians that fear guns.
The Old Cannon Armory is an FFL/SOT in the Austin area. We now carry FROGLUBE products
$20 transfers for current CHL holders, fire/police, and veterans, $30 for others, $50 for Class III items
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Re: Getting and 01 & 06 FFL at home?

Postby Beiruty » Mon Mar 05, 2012 11:23 pm

To get 01 and 06 FLL do you need to be a citizenship, or will a green card be enough?
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Re: Getting and 01 & 06 FFL at home?

Postby sublevel » Sun Mar 18, 2012 10:34 pm

I mailed my paper work off friday, I spent some time talking with an ATF investigator a couple of times and feel I should be a go...

I also included all sorts of supporting documents (proof of registered business, tax id info, domain name registration, copies of IDs, CHL information and 03 FFL copy, proof of ownership of home, copy of loacl zoning rules

I was told that was a lot of information to turn in, but every little bit helps, even though they said they would go over all that at the visit

Lots of support from local PD and friends... wish I could jump into a full retail business, lol

figured based on my area transfer fees are going to be 20.00 with discounted rates for members, CHL holders, NRA members, and good rates for LE and Military and local gun club members... still cheaper than anyone else... and I know I can provided better customer service :D

these next 60 days are going to be long but I hope worth it...
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Re: Getting and 01 & 06 FFL at home?

Postby sublevel » Thu Apr 05, 2012 2:46 pm

My debit card was charged on march 23, called ATF April 5th they said VA had my application march 27 and it would be 60-90 days after that before I know anything

I thought they only had 60 days?
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Re: Getting and 01 & 06 FFL at home?

Postby OldCannon » Thu Apr 05, 2012 2:51 pm

sublevel wrote:My debit card was charged on march 23, called ATF April 5th they said VA had my application march 27 and it would be 60-90 days after that before I know anything

I thought they only had 60 days?


Depends. From the time I sent in my app to the time I got my license it was 4 weeks. Kinda blew me away, actually.
I don't fear guns; I fear voters and politicians that fear guns.
The Old Cannon Armory is an FFL/SOT in the Austin area. We now carry FROGLUBE products
$20 transfers for current CHL holders, fire/police, and veterans, $30 for others, $50 for Class III items
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Re: Getting and 01 & 06 FFL at home?

Postby sublevel » Thu Apr 05, 2012 4:40 pm

well Im hoping that with all the extra stuff I sent and already having my 03 FFL and Texas CHL that it might be just as quick

all I am doing now is getting my house in order, web site design started, and putting the word out things are in motion
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Re: Getting and 01 & 06 FFL at home?

Postby OldCannon » Thu Apr 05, 2012 4:48 pm

sublevel wrote:well Im hoping that with all the extra stuff I sent and already having my 03 FFL and Texas CHL that it might be just as quick

all I am doing now is getting my house in order, web site design started, and putting the word out things are in motion


The 03 won't matter at all. C&R is kind of a tinkertoy FFL (no offense). As for the 06, I still don't understand why you don't get an 07 (of course, changing from an 06 to 07 only takes a few weeks, but still...)
I don't fear guns; I fear voters and politicians that fear guns.
The Old Cannon Armory is an FFL/SOT in the Austin area. We now carry FROGLUBE products
$20 transfers for current CHL holders, fire/police, and veterans, $30 for others, $50 for Class III items
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Re: Getting and 01 & 06 FFL at home?

Postby sublevel » Thu Apr 05, 2012 8:00 pm

the reloading ammo idea for profit went out the door when I found out that you got to pay all the taxas on it plus the additional insurance...

too think I dumped a ton of money into my steup (hornady LNL progressive, like 11 different shell plates including 5.7 custom, hornady matching dies, measures, etc - which might just go up for sale since I have a single stage also) before I got the wording from the ATF agent... basically the 06 fee, 11% taxes on sales, and close to 2500.00 for ITAR (??) I think it was, plus the 1,000,000.00+ insurance incase there ever was an accident... I am curious how several people get away with selling reloads at shows or even online (if what I have been told is correct)

No harm on the 03 FFL comment, I didn't know how much more they look into it and an 01 FFL over an 03 FFL (figured it would be more indepth anyways) I gave them everything they wanted an then some (nealy 14 pages of extra supporting info)...

Also I didn't get the 07 FFL do too money, parents needed help (dad makes jack on retired military pay and moms dying of cancer ((terminal)) and Ive been helping them live, so business funds almost went out the door, but Im (trying) selling a few guns and things to cover that

to work on or clean guns legally for others do you need to have an 01 FFL??? (obviously have not looked into yet)

thanks again for you time, help, and answers - very much appericated
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Re: Getting and 01 & 06 FFL at home?

Postby OldCannon » Fri Apr 06, 2012 11:27 am

sublevel wrote:the reloading ammo idea for profit went out the door when I found out that you got to pay all the taxas on it plus the additional insurance...

too think I dumped a ton of money into my steup (hornady LNL progressive, like 11 different shell plates including 5.7 custom, hornady matching dies, measures, etc - which might just go up for sale since I have a single stage also) before I got the wording from the ATF agent... basically the 06 fee, 11% taxes on sales, and close to 2500.00 for ITAR (??) I think it was, plus the 1,000,000.00+ insurance incase there ever was an accident... I am curious how several people get away with selling reloads at shows or even online (if what I have been told is correct)


Well, you can always ask them ;-) Most folks are glad to talk about their business at gun shows, so long as you don't scare other customers away. Truth be told, lots of ammo folks scrimp on the ITAR fees (i.e. - they don't pay). Nothing wrong with being a good reloading component reseller though. Folks like knowing people that know how to make ammo just right, and they like it even more if they can buy from you.

All kidding aside -- I would definitely talk to people in the ammo-making business. Good business people don't mind talking to you about their model and how they get things done.


No harm on the 03 FFL comment, I didn't know how much more they look into it and an 01 FFL over an 03 FFL (figured it would be more indepth anyways) I gave them everything they wanted an then some (nealy 14 pages of extra supporting info)...

sublevel wrote:Also I didn't get the 07 FFL do too money, parents needed help (dad makes jack on retired military pay and moms dying of cancer ((terminal)) and Ive been helping them live, so business funds almost went out the door, but Im (trying) selling a few guns and things to cover that


I went through almost the same thing with my younger brother. He had terminal cancer, so I basically took all the money I was saving for my FFL business and spent it to give him the best last few months possible. He passed about 11 months ago.

sublevel wrote:to work on or clean guns legally for others do you need to have an 01 FFL??? (obviously have not looked into yet)


You cannot legally "take possession" of a gun (i.e., keep overnight, etc.) without being an 01.
I don't fear guns; I fear voters and politicians that fear guns.
The Old Cannon Armory is an FFL/SOT in the Austin area. We now carry FROGLUBE products
$20 transfers for current CHL holders, fire/police, and veterans, $30 for others, $50 for Class III items
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