View Full Version : Legal Entity Ownership of firearms? and multi-state movement of those firearms?

10-25-2007, 10:31 AM
Ok... I'm thinking through a new firearms business idea but I'm having some problems trying to do the legal research on this; so any help you all can provide on how to do this legally; would be appreciated.

A. I want some of the protections offered by legal entities like a Corporation.

B. Corporate law in CA - is not very attractive in general; therefore I'm looking at other states to incorporate in.

C. I'd like to have this non-CA corporation own a number of firearms; mainly for liability protection reasons.

D. Principals of this corporation would reside in multiple states; CA being one of them.

So first question; how can a corporation own the firearms? I know its possible as the easy example of the Armored Car business exists; and/or armed security services... But I've been unable to find anything on the ATF site (probably just not knowing what to search for) - I also reviewed the ATF form 4473 but this appears to only encompass an individual - not a company. Doing some Googling I found something about NFA items purchased through a corporate entity or estate; require a LEO to sign the paperwork? unless it's a principal of the corporation and/or the person who created the estate. But I'm not doing NFA items; I'm just thinking plain old longarms; and handguns. Anyone know what legal stuff I need to go through on this one?

NEXT; assuming the above can be figured out... this company would then employ people.

A. People working for this company could be principals (corporate officers), employees, temp-employees, or independent contractors - who as part of their jobs would be using these firearms for various reasons.

B. It's possible the people working for this company would be in various states.

C. Background checks on all people working for the company would be mandatory; and therefore people who are not legally allowed to own a firearm; would never be handling firearms owned by the corporation.

So the second question is; with a legal entity owning the firearms; how can this company legally send different firearms to different people working for the company; at various places around the country? At no point does firearm ownership change - the corporation will always own the firearm; and the person using the firearm for their job; will be expected to return the firearm back to the company when their job with that firearm is completed. Is it just the hoops that shipping company would impose or is there more to it?

Sorry for being a bit vague as to what kind of business it is - for the obvious reasons that it's a new business idea; and I don't want to share it - less everyone who reads this may also like my idea; and do it before I can! :D

However; just to alleviate some people's thoughts; lets just say AB 854 - has me thinking. :)


10-25-2007, 12:15 PM
You will run into a few problems. I know Nevada for example you have to have a business license and a business front in order to do pretty much anything with a corporation or any other business form, even to just own assets (guns). And yes, even if you are do not want to make money with a corporation or llc you still need to have a business license. You could have the business incorporated in Nevada but be in California, but then you would have to go through all sorts of steps which would include registering as a foreign corporation and this would pretty much make what you were trying to do worthless.

I know a few people that have looked into this and it is doable only if you are actually going to have a real business and a real office somewhere. Having a resident agent, a storage locker, and a mail forwarding service is Nevada would not work.

A host of other tax issues arises when doing this, which are not even worth going into.

If you want to protect your legally owned assets in California, you may want to look into a Revocable Living Trust. And you cannot do a Trust in Nevada unless you are the benefactor are residents.

10-26-2007, 7:04 AM
Well it seems I only like to ask the hard questions... :) Anyway, for a bit more detail... yes, this will be a real business; making real income; paying real business license fees is not an issue; although paying for store fronts will not work, in each state; it certainly can exist in the home state of the corporation.

Arguy15, I was not planning on incorporating in NV, but thanks for the info... a living trust wont work for me, I will have business partners.

So anyone know the firearms details of my questions in relation to corporate entities?


10-26-2007, 7:57 AM
Do you need a corporation?

A trust works too for various firearms matters and one can be set up for ATF specs.

10-26-2007, 2:14 PM
Do you need a corporation?

A trust works too for various firearms matters and one can be set up for ATF specs.
First hand experience indicates within the last 6 months that an atf attorney WILL review trust legality in the fine-tooth-comb mode before the atf approves an nfa transfer. Even if a previous transfer to the same transferee was approved 2 weeks before.;)

If you're starting a trust or corporation for any firearms purpose, recommend you do NOT do it yourself.


10-29-2007, 9:29 AM
Do you need a corporation?

A trust works too for various firearms matters and one can be set up for ATF specs.

Bill, I was advised by my legal folks, to create a LLC - to do this business... which is why I'm asking the question about corporations.

Now I could make this much more complex and have multiple legal entities; but I was trying to avoid that...


10-29-2007, 8:27 PM

Delaware. You'll then have to file as a foreign corporation in any state you do business in - like California. Delaware is your corporation and trust domicile of choice for all things in the US...


10-30-2007, 4:17 AM
A trust works too for various firearms matters and one can be set up for ATF specs.

This looks interesting, who, what, where, ect...?

10-30-2007, 5:04 AM
This looks interesting, who, what, where, ect...?

Revocable living trusts are being used to purchase NFA items. Trusts are not "loopholes" as some claim. They are legal entities just like corporations and LLC's that are owned by individuals. Unlike LLC's and corporations, there are no maintenance fees associated with trusts (that I know of). Some states require you to register your trust but this is rare.

While some people have used trusts as an inexpensive way to get around CLEO signatures, a lot of people are finding that they are just more convenient to work with. No time delay for for pictures, fingerprints, CLEO signature.

There is a thread at AR15.com that has a lot of stupid information and a little good information. The good information has been put out by knowledgeable people with experience with trust law and originally started on Sigforums IIRC. Its been quite helpful to me and I couldn't imagine going any other route :)

10-30-2007, 8:16 AM
Hmm... things to ponder... haven't seen much in response to my 2nd question though.

I've been doing research on my end as well, see if this makes sense...

Assuming I (or an entity I create) is the legal owner of the firearms... and I want to send one of my firearms to a person working with me on my business; "... for temporary ... lawful sporting purposes ..." in another state... The following on the ATF site; seems to support me doing this legally.

B1) To whom may an unlicensed person transfer firearms under the GCA?

A person may sell a firearm to an unlicensed resident of his State, if he does not know or have reasonable cause to believe the person is prohibited from receiving or possessing firearms under Federal law. [b]A person may loan or rent a firearm to a resident of any State for temporary use for lawful sporting purposes, if he does not know or have reasonable cause to believe the person is prohibited from receiving or possessing firearms under Federal law. A person may sell or transfer a firearm to a licensee in any State. However, a firearm other than a curio or relic may not be transferred interstate to a licensed collector.

[18 U.S.C. 922(a)(3) and (5), 922(d), 27 CFR 478.29 and 478.30]

HOWEVER.... all of the following - shows it's not practical to do... unless I hand carry the firearms.

(B7) May a nonlicensee ship a firearm through the U.S. Postal Service?

A nonlicensee may not transfer a firearm to a non-licensed resident of another State. A nonlicensee may mail a shotgun or rifle to a resident of his or her own State or to a licensee in any State. The Postal Service recommends that long guns be sent by registered mail and that no marking of any kind which would indicate the nature of the contents be placed on the outside of any parcel containing firearms. Handguns are not mailable. A common or contract carrier must be used to ship a handgun.

[18 U.S.C. 1715, 922(a)(3), 922(a)(5) and 922 (a)(2)(A)]

(B8) May a nonlicensee ship a firearm by common or contract carrier? [Back]

A nonlicensee may ship a firearm by a common or contract carrier to a resident of his or her own State or to a licensee in any State. A common or contract carrier must be used to ship a handgun. In addition, Federal law requires that the carrier be notified that the shipment contains a firearm and prohibits common or contract carriers from requiring or causing any label to be placed on any package indicating that it contains a firearm.

[18 U.S.C. 922(a)(2)(A), 922(a) (3), 922(a)(5) and 922(e), 27 CFR 478.31 and 478.30]


Firearms will be transported only between licensed importers, licensed manufacturers, licensed dealers, and [b]licensed collectors, as defined in the United States Gun Control Act of 1968, law enforcement agencies of the United States or of any department or agency thereof and law enforcement agencies of any state or department agency, or political subdivision thereof, and between persons not otherwise prohibited from shipping firearms by federal, state or local law and when such shipment complies with all applicable federal, state and local laws.

* You must ship your packages that contain handguns with UPS Next Day Air® Early A.M.®, UPS Next Day Air®, or UPS Next Day Air Saver® services
* Your packages that contain firearms will not be accepted for shipment at UPS Drop Boxes, with UPS Express CriticalSM service, at locations of The UPS Store® or any third-party retailer, or with international services.

BUT... all this language reminds me... I'm a FFL type 03 (licensed collector)... so I am considered licensed by Federal standards.

So humorously if all the people I work with - are also FFL type 03 (licensed collectors)... and any firearms being sent back and forth - were sent for the purposes of "... temporary ... lawful sporting purposes ..." - doesn't this mean... it's legal? hmm... wonder if a bound books need to be updated... it's not ownership transfer... it's a "loan"...

This is perhaps too easy... I must be missing something... wonder what the legal definition of "lawful sporting purposes" is...


10-30-2007, 8:22 AM

10-30-2007, 8:01 PM
A trust is probally the best entity to do this in, and Deleware is probally the best place in which to do it. PM me if you want to discuss details.