Trusts and FFLs?

[Eric P]

Ok, so the search function returned to much of what I wasn't looking for.

My can a FFL be registered to a trust?

I am looking at setting up a trust for a few items, and I would like to get a FFL to make some extra cash to pay for this hobby. I was wondering if there is any benefit if it was possible to doing this.

Thanks

[Great-Kazoo]

Do an LLC, which is the direction i am going. Anyone applying for the FFL must have an ATF BG check done. SO unless all the people on your trust are having the BG check done it's no. I spent 45min ~ last thurs talking to an agent regarding a FFL and people incl on it. If we were on the trust, both of us need to have a BG check done. Not only that anyone you would add to the trust must do a BG check AND ALL aspects of the FFL 01 (as an example) get done again. Contacting the place you will be doing business with, same 60 day wait for approval, SAME NEED TO PAY
[ AGAIN] etc.
FWIW: The renewal date fiscal year for renewal is July? (don't have info present) IF you apply now and the 60 days is say june 15th for approval, and renewal is july 1st. There is no pro rating for payment. So you get approved June you pay full boat for the LIC. Then 2 weeks later you pay full boat again.

[Great-Kazoo]

Do an LLC, which is the direction i am going. Anyone applying for the FFL must have an ATF BG check done. SO unless all the people on your trust are having the BG check done it's no. I spent 45min ~ last thurs talking to an agent regarding a FFL and people incl on it. If we were on the trust, both of us need to have a BG check done. Not only that anyone you would add to the trust must do a BG check AND ALL aspects of the FFL 01 (as an example) get done again. Contacting the place you will be doing business with, same 60 day wait for approval, SAME NEED TO PAY
[ AGAIN] etc.
FWIW: The renewal date fiscal year for renewal is July? (don't have info present) IF you apply now and the 60 days is say june 15th for approval, and renewal is july 1st. There is no pro rating for payment. So you get approved June you pay full boat for the LIC. Then 2 weeks later you pay full boat again.

After rereading what i just posted the short answer is NO.
Everyone added needs to have the whole process done per person. AND PAY

[Circuits]

A trust cannot hold an FFL. Need to go corporation or partnership or some other entity intended for doing business. A Colorado LLC is pretty cheap to set up and maintain, though it does require some annual paperwork and such, so is more work to maintain than a trust. Persons added to your LLC (for instance) only need to have bg check done if they are going to be listed as responsible persons on the FFL.

[NFATrustGuy]

Trusts simply aren't designed to be business entities. Go with a corporation or an LLC. I do about 20 LLC's for every 1 corporation in my practice.

Rod

[Eric P]

Thanks all

[NFATrustGuy]

I realize I'm comitting a bit of a necro-post here, but I wanted to follow up. I was doing a little research on another matter and came upon a February newsletter published by the ATF to FFL's that specifically addresses this issue. It says basically what all of us said re: a Trust holding an FFL. Talk about a needle in a haystack...

Here's the URL to the newsletter:

http://www.atf.gov/files/publication...er-2011-02.pdf

And here's a cut & paste of the relevant text:

Only a “person,” as defined by the Gun Control Act of 1968 (GCA), 18 U.S.C. Chapter 44, can obtain a Federal Firearms License (FFL). Under the GCA, 18 U.S.C. §§ 922(a)(1) and 923(a), no person may engage in the business of importing, manufacturing, or dealing in firearms, or importing or manufacturing ammunition, until that person has filed an application with and received a license to do so from the Attorney General. The GCA provides that “[t]he term ‘person’ and the term ‘whoever’ includes any individual, corporation, company, association, firm, partnership, society, or joint stock company.” 18 U.S.C. § 921(a)(1). The term “person” does not include trusts.


A trust can be created in various forms. However, the characteristic common to all trusts is the separation of legal and equitable title to property, with legal title held by the trustee and equitable title held by the beneficiaries. As stated above, “person” in the GCA includes the following legal entities: corporation, company, association, firm, partnership, society, and joint stock company.


Generally, these entities are organized for the purpose of carrying on a commercial enterprise or profession, and often have business licenses to support their operations. Although a trust holds and can manage property, and the trustee may acquire and dispose of property that increases the amount or value of the property held in trust, the purpose of the most all trusts is not to carry on a trade or profession. With a trust, the trustee has a fiduciary obligation to enforce the instructions set forth in the trust agreement for the benefit of third persons. The parties (i.e., contributor/settler, trustee, and beneficiary) are generally not associated with each other to carry out a commercial enterprise or profession.


After evaluating the issue, ATF has determined that trusts that are not lawfully incorporated and registered with the applicable State pursuant to State law may not obtain a license under the GCA. Licensees should contact the Federal Firearms Licensing Center (FFLC) and/or the applicable field division for additional information concerning issuance of an FFL to a trust.