Considering some work on the side- need help...

[Ronin13]

So my brother and I had this real in depth conversation over the past two days and I think this is a pretty genius idea. He and I have been considering getting a house together for some time- yes, own it, not rent. After we make the purchase he wants to apply for his FFL so he can deal in firearms and probably make a career out of it. I have already expressed my desires for a career, but as far as side work, I would love to get some experience/instruction in being an AR platform armorer (note: not a gunsmith- I have no desire to machine anything, and I'd rather not compete with Bert ) and had a few questions about this. If little bro does get his FFL and starts selling weapons, if I take a multitude of parts from different companies and build ARs (thus making a frankenrifle), what are the grounds for selling these via his FFL? Can I get base lowers and have them stamped with some sort of new name? Or would I have to get my FFL and perhaps even take some gunsmithing courses? How would that work legally, and practically? I'm not talking about building from blocks of metal, I'm talking already built individual components of a rifle, and taking some of the best parts (IE: Geissele triggers, MAGPUL grips, BCM BCG, etc.) and combining them into a custom rifle. Am I way off and can only sell these as whatever the receiver is titled as? Are there bare bones, unmarked, stock lowers and uppers that are legal (both in terms of gun laws and copyrights) to stamp with my own brand or whatever? This is just throwing some ideas around on a side hobby for myself, and I plan on taking classes to become either certified or otherwise educated in complete dismantle and rebuild of AR components and parts. Any help on where to go for that?
ETA: Also possibly looking into doing AK platform as well...
Thanks.

[J]

You would have to get a type 07 FFL (manufacturer), keep it current each year, and pay the Dept of State the $2500 ITAR registration every year. You will need to incorporate in some way, LLC, S-Corp, C-Corp.

You should also be looking in to some hefty insurance policies. Both liability and E&O. If you assemble it, and something happens you can bet on getting sued.

You should also check the HOA out wherever you are looking at houses. If they disallow operating a business at your house, you aren't allowed to get an FFL to a business addressed there.

[Ronin13]

You would have to get a type 07 FFL (manufacturer), keep it current each year, and pay the Dept of State the $2500 ITAR registration every year. You will need to incorporate in some way, LLC, S-Corp, C-Corp.

You should also be looking in to some hefty insurance policies. Both liability and E&O. If you assemble it, and something happens you can bet on getting sued.

You should also check the HOA out wherever you are looking at houses. If they disallow operating a business at your house, you aren't allowed to get an FFL to a business addressed there.

Thanks for that J... I have looked into the operating a business out of the house- a little more for our homeowners ins, but we can roll in a BOP as well... and seeing as how I work in insurance currently I do know all about liab and E&O being mandatory. So I would need a manufacturer's FFL... that's one of the things I was wondering. So as far as the FFL side goes, you pretty much answered every question I had! Thanks! And searching around, I have found some no-logo lowers, but what is the legality (such as from Mckay) on stamping my own logo on it and selling it as a "XXXXXX Custom Rifleworks" weapon? <Aside from the FFL part, which J covered.

[sniper7]

Pretty much what J said. Check local zoning as well because there are restrictions on home based businesses unless the zoning allows. HOAs are an issue. Check with the local LEO as well. Maybe talk to another FFL in the area although he may not want to help the competition.

You would be better off selling the stripped lowers only or complete factory rifles with warranties.

Think about taxes and look into write offs for the business.

With the house there are also restrictions if you receive money from Obama to get into a house if you start a home based business.

Then last you AND especially your brother need to take a step back and think about their business partner and see if they will be reliable and put in the required effort to make it a business and not just a hobby. Maybe even talk to your dad about running a business and if a partner is a smart idea...especially if it is family.

[J]

Once you have the 07 FFL, and the ITAR done and paid, you can get unmarked lowers and then stamp your logo, company name and location (city and state) caliber and serial number in to them. They must have the above stamped before you can sell them.

[DangerLee_Industries]

I've been going through the process in last 2 weeks. Shoot me a pm if you have any further questions I may be able to help..

[Ronin13]

Once you have the 07 FFL, and the ITAR done and paid, you can get unmarked lowers and then stamp your logo, company name and location (city and state) caliber and serial number in to them. They must have the above stamped before you can sell them.

Oh that's it... wow... So the ITAR and 07 FFL process is probably the biggest, and most expensive hurdle.

I've been going through the process in last 2 weeks. Shoot me a pm if you have any further questions I may be able to help..

Awesome, thanks, but we're still in the planning stages- we've both talked about getting our FFLs for about 3 or 4 months, but now he's seriously considering it. But we're not quite as far along as you yet. If I have any questions as time goes by I'll definitely give you a shout.

[RCCrawler]

Your brother shot himself in the leg, I'm thinking an FFL is a little too advanced for him.

[jhood001]

I can't comment on the FFL business, but I would recommend you take a very serious look at purchasing a home with him. Generally speaking, purchasing a home with a friend or family member is a poor choice if it will be in both of your names. It is far better for one of you to purchase in your own name and split the mortgage payments with the understanding that any profits made from selling it in the future are split.

It isn't a matter of trust, so much as people's lives change. One of you could decide to want to move away and want to sell while the other wants to stay. One of you could fall in love and want to move your significant other in. The market could take another dive and you could both be upside down on the place and one of you would want to sell for a loss while the other wants to live in the home indefinitely. Way too many variables.

I only mention this because I have seen two friends go through it and it landed them both in situations that were very difficult.

[Danimal]

You know I have to say honestly I have thought about everything that you have brought up as a business possibility and what it comes down to is that you have to be very good at paperwork. You will be doing way more of that than building rifles for years before you ever see a profit. The laws with this type of stuff are very complicated, they got that way through decades of litigation between lawmakers and lobbyists like the NRA. Both are fighting for an edge and it makes it very complicated if you want to get into the type 07 FFL world. I know people that do it, but they had a great deal of financial resources at their disposal to get everything up and running the right way. They had to hire lawyers to research their methods and their business model before anything was even purchased.

If you are going to buy a house to do all of this in, there are a ton of things that you need to look into regarding zoning, covenants, county laws and regulations, and much much more. To work from home uncle sam needs his cut so there are a ton of rules in place to make sure that you are operating within tax laws.

I am a very organised person, and I am very good at paperwork but after looking into what is required to run a business of this type I have abandon the idea. You will need to devote 100% of your time to running the business just to break even. It is not a side job kind of a thing. If you just wanted to run an FFL from home that is one thing, and you could probably do it offering cheap transfer services for people and running a small business that buys and sells new weapons. But beyond that I would say take baby steps into the industry and feel out the laws before diving in.