Can my business buy a transferable MG

[Dtu2179]

Hello everyone,

This may seem like a silly question or a question that may have already been answered, but Im curious if my business can purchase a machine gun or machine guns for investment purposes as an LLC. Would I simply mark on the form 4 the name of my business and mark it as a corporation? Obviously it would still need to go through a dealer in my home state.

 

Your input is appreciated.

 

Duane

[mattnh]

Yes, very common.

In fact, the required transfer paperwork (Form4) has a specific option for this.

Transferee would be the name of the LLC. You will need to also complete responsible person questionnaires for each RP of your LLC.

 

Also, obviously, whatever NFA item you wish to possess has to be legal in your state

[Dtu2179]

Awesome, thanks for the info.

 

Duane

[BRMCII]

Keep in mind that the NFA is the "property" of the corporation, and is not your personal property. The NFA cannot be moved out of the corp without a $200 tax on transfer. If the corp is an FFL/SOT then the NFA can be moved out under the tax exemption of the SOT.
If you would care to elaborate, why do you choose to put the NFA under a corporate structure? Just curious.

[Dtu2179]

Just curious as to my options. I was looking for some investment strategies for the business and since I already like and own other NFAweapons I thought this would be a good option for fun investment. I am not a FFL. My business primarily does firearms training and consulting.

[johnsonlmg41]

Been doing it at least 15 years and have not done any personal transfers in that timeframe. Many advantages, but the paperwork is a slight disadvantage as is the annual registration fees if this is the sole purpose of the company. Fees vary by state as do annual filing burdens. The one's I've dealt with are 25-$50 a year and 5 minutes of filing annually.

 

If I did training, I doubt I'd ever have a "personal" firearm on the premises, too much liability?

[Got Uzi]

You have to make sure that you transfer it out of the corporation before it is killed/dissolved. Otherwise it can be a big issue as no one will technically own the gun. This is the case currently with a Thompson I know of. Guy bought a transferable gun and had it in his corperation for years, then killed/dissolved the corporation, but continued to pay his FFL and SOT for 9 years after on the dead EIN Corp Number...then someone caught it. Now heres a gun that is a transferable, but because someone failed to do their paperwork correctly, itll have to be donated to a museum (most likely with no possible tax write off) or itll be turned into a parts kit.

 

Needless to say his investment is now up a creek without a paddle.

[Grasshopper]

Hi All,

 

I'll second what Got Uzi mentioned. Over the last 5 years there have been 3 MG's locally that were registered to defunct corporations. I'll leave it at there was a significant amount of work done to salvage these guns. I would imagine the same problem exists if a trust is dissolved or is found invalid while the trust is possessing NFA items.

 

With personally owned NFA firearms, the transfer from a deceased owner is well understood. I'd be interested on how this works for corporations or trusts if the RP's pass or the legal entity is dissolved while holding NFA firearms.

 

Grasshopper

[johnsonlmg41]

The RP has no bearing on the assets of a corp, they are effectively the registered agent and can be changed out instantly. As long as the corp is not administratively dissolved whatever is there is free to be sold with the corp without even doing a transfer. If you dissolve a corp, that's intentional and thus you've effectively destroyed the firearm. There are potential ways of clawing back, but it would fall under the "cost outweighs the benefits" motto. \

 

Trusts......not going to go well in the long run.

 

A LOT more guns have been lost due to lost paperwork in estates. Same thing with an estate, if it's been closed out for a while, the odds of reopening and transferring get slimmer as time goes on. As we know atf is not particularly helpful in tracking down ownership of firearms without you providing the documentation. I keep at least one other set of documents off site in case of a fire, etc., because without your own copies of forms you are at risk in general.

 

The museums that qualify for form 10 guns don't want more guns unfortunately.

[Varminter]

Do you need to be/hold an FFL license? If your intent is to purchase firearms and resell them for monetary gain, the ATF might consider you a dealer in firearms. You don't need an FFL to sell off your collection, or your late spouse's collection, but if you buy a firearm with intent to resell at a profit, I believe you need an FFL. The business plan might be sound (certainly better than the silver and gold I invested in), but if he intent is to make a profit....

 

I'm ok if I am proved wrong on this.