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M1921 Inc.


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#1 farfuture

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Posted 02 April 2006 - 08:55 PM

So here’s a “scheme” (using the word in the British sense: not illegal, immoral, or even unethical, just a way of doing things).

With the rising cost of Thompsons reaching the multiple tens of thousands of dollars, the relative costs in his structure become at least possible. So help me see the flaws, drawbacks, or other problems?

A corporation can own a Thompson. Create a corporation. Since this is not a process meant to make any real profit, make the corporation a “C” Corp with shares. You can ultimately privately sell those shares to anyone.

Buy a Thompson under the corporate name as a corporate asset as an investment. I understand this will probably have to be a corporation in a state which will allow ownership.

There is probably an expense associated with this continuing project. Accounting costs, tax filings, annual reports to the state.

My thought is this…

Ultimately, when the time comes, the corporation doesn’t sell the Thompson, it sells its shares (and thus its assets) to a new shareholder. The new holder of the 100 shares of stock in M1921 Inc. takes over the assets, the responsibilities, and everything else.

There would be no forms to file with BATF, no reports, no approvals, no CLEO signatures or approvals. I suppose there would be a corporate filing if the location of the Thompson changes. But that should be routine.

Remember to properly hold corporate meetings and observe the legal requirements.

BTW, nothing here is supposed to be a plan to violate any laws. I’m not proposing anything wrong, and if it is “wrong” I would like to know about it.



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#2 Lancer

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Posted 03 April 2006 - 12:13 PM

There was a lot of talk over on Subguns a while back about buying NFA under a revocable trust. It supposedly is much cheaper than a corp to start and maintain. When the time comes for my next purchase I'm planning on contacting an attorney that specializes in trust to explore this option.
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#3 October1971

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Posted 03 April 2006 - 08:07 PM

I've had theory for years that is sort of a hybrid of this scheme. But haven't found anyone to try it out. It goes like this:

(This scenario assumes that your local Sheriff or Chief does not sign for Form-4s in your jurisdiction.)

You go to the local Sheriff and say: "Mr Sheriff, I'm planning to buy 10 mgs and 10 silencers over the next 5 years. Will you sign the Form-4's for me?" Mr Sheriff says: "No I don't think I will sign."

Plan B - Incorporate, for investment purposes, and over a period of 5 years, buy 10 rare mgs and 10 silencers. Then go to the Sheriff and say: "Mr Sheriff, my corporation owns many thousands of dollars in valuable automatic firearms acquired over the last 5 years. But now my CPA and Tax atty are advising me, for tax reasons, that I ought to close out my corporation. Trouble is, I will need your signature on these 20 sets of Form-4s and I will have to pay $200 transfer tax on all the items (even though the govt. already got $200 each when the corporation bought them. ) Since I AM the corporation, and I'm already in possession of the items, and have invested thousands of dollars in the investment, I naturally don't wish to dispose of them at this time. So I'll need your signature to transfer them from my corporation to me individually."

It is my personal opinion that "Plan B" may work for an individual who can not otherwise obtain the signature of a local official.
It may still take an atty to lean on the official, but I think he'd have a better chance than asking for the signature PRIOR to the purchase.
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#4 farfuture

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Posted 04 April 2006 - 01:44 AM

My tentative plan is to move to South Dakota. One of the first steps, once I get there, is to make a reasonable campaign contribution to the local sheriff. Even if I pursue the corporate route for ownership.



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#5 TSMG28

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Posted 04 April 2006 - 10:48 PM

October,

Your plan might work, but it depends on the reason that the Sheriff will not sign. In my case, my Sheriff (and every other CLEO in my jurisdiction, Republican or Democrat) is afraid of the political fallout come election time. They told me very clearly years ago that they will not sign the forms for that reason. I presented many practical facts and explanations, including the results of a lawsuit in an adjoining county where the Sheriff was compelled by a judge to sign the paperwork. Basically, his response was - don't confuse me with the facts....

I formed a corp and acquired my MGs that way. I saw the Sheriff a year ago and shared that information with him. His response was, "I'm glad you were able to work it out, because I will never sign one of those forms."

Good Luck!!
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