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California 2nd Amend. Political Discussion & Activism Discuss gun rights activism and 2A related political topics here. All advice given is NOT legal counsel.

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Old 04-10-2010, 1:15 PM
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Default Questions on business ownership of firearms

I'm trying to understand how it works when a company owns firearms. For example, when a company buys a firearms (say, a handgun, since they require registration at the time of sale in CA), how is the sale processed? If I understand correctly, it'll have to be DROSed to an officer of the company, right? As such, the handgun will then be registered to him. What if he leaves the company? Will the transfer from him to the company have to occur? Would that be a transfer to another officer of the company then?

What if I try to sell some of my guns to a company that's not in the business of buying/selling firearms, and not in the props business, either? It just does, say, reviews of firearms, or uses them to arm its officers at the place of business (7-11, anyone? ), or something to that tune, those are the two I came up with to give an example of non-Hollywood and non-FFL business. How would such sale be processed?

Also, if the transfer has to be done to an officer of the company, the other officers of the company can still use those firearms, right, as long as they have the company's permission? Provided none of them are prohibited persons, of course, and have the HSC in case of handguns.

I'm sure there're lots of similarities to NFA trusts here. However, does it work the same for different entities? Would it work the same for a corporation, s-corp, LLC, partnership, and it would for a trust?

Also, if I'm the officer of the corporation who's in charge of procuring the firearms (and so it's reasonable to assume that I'll be the one to do the DROS, if that's the requirement), how would I go about selling any of my guns to the company? Transfer them from myself to myself, or just write the bill of sale, since they're in my name, anyway?

While I appreciate any relevant responses, citing the appropriate laws and regulations are appreciated even more
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Last edited by nick; 04-10-2010 at 1:18 PM..
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Old 04-10-2010, 3:06 PM
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I've seen this question here before, and from what I recall the company cannot own the firearm, it always has to be a persons name.
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Old 04-10-2010, 5:36 PM
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I've seen this question here before, and from what I recall the company cannot own the firearm, it always has to be a persons name.
I dont think you are correct. I have seen trucking companies and security companies - that are corporations, own shotguns and handguns. I would imagine that the principals are checkedout to insure they are not prohibited, but there must be an avanue for non person entities to own firearms and to continue the ownership even when principals change. Im sure someone will come along soon and clarify..
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Old 04-10-2010, 8:50 PM
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I'm hoping that someone will. I've read what I could find here on Calguns and elsewhere, but didn't see a definite answer.
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Old 04-10-2010, 9:44 PM
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Discussed here:http://www.calguns.net/calgunforum/s...d.php?t=216756
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Old 04-10-2010, 11:57 PM
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Lots of great information in the link gotsig provided. I also posted in that thread. To add a little more information, the state won't allow companies to do some things; California won't let a company hold an engineering license or architectural license, but they will allow a company to hold a contractor's license (from what I have been told).


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Originally Posted by nick View Post
Would it work the same for a corporation, s-corp, LLC, partnership, as it would for a trust?
Short answer: Yes. From a business perspective, the only difference between these is taxes/profit taking and ownership. Although this is high simplified, that is typically what determines the way you would structure a company.

It would be easier to answer/give advice if you provide more information on what you wanted to do. Setting up a company or buying guns via a company that doesn't have a specific need to own guns would be costly, a lot of effort, and risky. If guns are not specifically required by the type of business, I would worry about a tax audit and other liability issues. If the company is set up only to own guns, it is a lot of paper work (annual meetings) and expensive; a minimum $800 tax each year and a person to do your corporate tax return.

An NFA trust would be a little more money to set up than a company, but the long term costs would be much less. No need to pay $800 per year or to file a tax return. I would think that a business that has a need to own guns would also be advised to own them within an NFA trust.

Bottom line: Hire Oaklander to set up your company and/or NFA trust.
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Old 04-11-2010, 2:27 PM
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Quote:
Originally Posted by ENG417 View Post
Lots of great information in the link gotsig provided. I also posted in that thread. To add a little more information, the state won't allow companies to do some things; California won't let a company hold an engineering license or architectural license, but they will allow a company to hold a contractor's license (from what I have been told).




Short answer: Yes. From a business perspective, the only difference between these is taxes/profit taking and ownership. Although this is high simplified, that is typically what determines the way you would structure a company.

It would be easier to answer/give advice if you provide more information on what you wanted to do. Setting up a company or buying guns via a company that doesn't have a specific need to own guns would be costly, a lot of effort, and risky. If guns are not specifically required by the type of business, I would worry about a tax audit and other liability issues. If the company is set up only to own guns, it is a lot of paper work (annual meetings) and expensive; a minimum $800 tax each year and a person to do your corporate tax return.

An NFA trust would be a little more money to set up than a company, but the long term costs would be much less. No need to pay $800 per year or to file a tax return. I would think that a business that has a need to own guns would also be advised to own them within an NFA trust.

Bottom line: Hire Oaklander to set up your company and/or NFA trust.
a single person must sign as qualifier for a ca contractor. if that person leaves another must take over or lic. is suspended. also, contractors cannot be llc's.
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Old 04-11-2010, 2:40 PM
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Quote:
Originally Posted by sfpcservice View Post
I've seen this question here before, and from what I recall the company cannot own the firearm, it always has to be a persons name.
No way. AFAIK, there's no type of property in existence which can only be owned by a natural person.

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Originally Posted by MP301 View Post
I dont think you are correct. I have seen trucking companies and security companies - that are corporations, own shotguns and handguns.
Sure. Or what about manufacturers, or trusts, or government entities? Many many not-a-natural-person entities can and must own firearms.
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