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FFL and C&R and business coonversion questions

reh5390
I am currently filling out the C&R license forms, but I am considering a FFL. I have read many of the FFL & C&R posts and have a few questions that have not been answered.

As i read the requirements and the application for the FFL, it clearly states and requires 'business hours' be listed on the application. Is a schedule that requires 'By Appointment Only' be an acceptable schedule to the BATF? the reason I ask is that as I search the FFLs here on GB as well as here in surrounding towns, there are several that are run out of a homes with out scheduled hours.

I am not necessarily starting a business to make a living at this point. It would be more as a hobby/part time/retirement business (15 years to retirement, working full time and own 2 other businesses).

Are the vendor benefits/discounts any better for a FFL vs the C&R?

If I, in the future, decide to convert to a FFL license, what are the requirements for the C&R records? Would they need to be moved to the FFL log for the business as inventory, or would they remain as a 'personal collection' and be moved when the sale takes place? How do gun shop owners manage this inventory issue.

Would there be a problem with me building a C&R collection, as well as a modern collection through FLL's, and at a point in the future starting a gun shop as a FFL and using my 'collection' as inventory?

With my C&R and the discounts offered by vendors and manufacturers could I start my business, build my client base with sales of ammo and and convert to a full service gun shop in the future?

Thanks for the input.
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Comments

9 comments

Date Votes
  • Herschel
    To get an ffl dealer license you must be zoned commercial where your ffl address is. You can live in your place of business but zoning may be the problem to overcome. You must also have sales tax permit, business licenses, etc.
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  • mark christian
    For a Type 01 dealer FFL you need to list at least some sort of business hours, even if only for one day of the week, so that the BATFE will know when you will be available for inspections. You can list other hours by appointment, but not exclusively. There is no mechanism to "convert" a Type 03 FFL to a Type 01 dealer FFL: You can have one or the other or both. I hold both types of FFLs and the records are totally and completely removed from each other. If you did for some reason step up to a Type 01 FFL and give up your Type 03 transferring your personal C&R firearms into your dealer inventory would be a huge mistake. If you hold a Type 01 dealer FFL and have personal firearms in your licensed premises (and nearly all of us do) then these guns must be clearly marked PERSONAL FIREAM, NOT FOR SALE. Mixing your personal guns in with your business inventory is another big mistake so keep your personal guns somewhere removed from your inventory or better yet, locked up in a separate safe and out of sight. You cannot use a C&R FFL to engage in any sort of business purposes so get that right out of your mind. If you want to be in business then you need the Type 01.
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  • reh5390
    Running a business out the house not a problem, rural location.
    If I were to get the FFL the plan would be to show a profit, as a business.
    If I go with a C&R and collect guns at today's prices, is there an Issue if I WANT to sell them as a 01 FFL down the road?
    What are the requirements to get a FFL to run a 'virtual' business out of your home may have been a better question.
    I have seen businesses that allow very limited public access to the business address, "pick ups only for local customers" without a mortar and brick storefront, insurance and overhead would be much lower.
    Several of the FFLs I am looking at are in dense residential locations.
    One of the FFLs I speak of is a LEO that works, how would one represent the scheduled business hours on the FFL application?
    There are no publicly published business hours.
    Does the FFL license holder have to be present during the business hours as reported to the BATF OR be present as requested by the BATF during business hours for inspection.

    Can I start selling Ammunition and Accessories as a business using the discount allowed by vendors if i hold a C&R? (these sales do not require a 01 licenses), while hold the C&R to build a stock of firearms for future sales after obtaining a FFL.
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  • mark christian
    You cannot use a C&R FFL in any sort of business ventures; it sole purpose is for you to enhance your personal firearms collection. You can have a Type 01 FFL and run the business out of your home, as long as local laws allow it. Don't automatically assume that a rural location lets you run a business from your home; get it in writing from the city or county because when the BATFE comes to visit you for the application interview they will be contacting the local authorities to ensure you are in compliance. Having it all in writing saves considerable time; but they will check on their own anyway. You don't have to make a single penny in profit to be engaged in the business, in fact you can lose money for all the BATFE cares, you just need to be properly licensed. There is no "virtual" gun business; you are either engaged in the business or you are not and the BATFE considered your home, if licensed, to be the same as any store front as far as the regulations are concerned. Your listed business hours are the times when the BATFE expects you to be available for inspections. If you are not there when the agent stops by (they don't call ahead) then the agent will leave his card on your door and expect you to contact him/her ASAP with the exact time and date when you WILL be there.

    The free and easy days of dealer FFLs ended about 20 years ago so if you want to be a gun dealer then you 100% better be one or you won't get your license approved. Don't play any dealer games with a Type 03 FFL. Not only is it prohibited but it makes things tougher and adds even more scrutiny to real collectors who hold the C&R license strictly for enhancing their firearms collections.
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  • nmyers
    As an Illinois resident, you need an FOID in order to buy any gun; I assume that you already have that.

    As Chicago politicians have found out, a Cooke County ban on guns just drives the residents to surrounding counties. Expect tougher laws in other counties to discourage the Chicago gangstas from buying guns on "field trips".

    If you decide to go into business as a dealer, keep in mind that your location will be public record. I can just picture what would happen if my wife were alone when a car load of friends from the 'hood pulls up & they start pounding on the front door.

    Neal
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  • slumlord44
    If you have a C&R and later on get anFFL, you would not want to transfer the C&R guns to the FFL to sell them. Income would become taxable at that point. C&R is a hobby. No income tax due on the sale.
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  • reh5390
    quote:Originally posted by slumlord44
    If you have a C&R and later on get anFFL, you would not want to transfer the C&R guns to the FFL to sell them. Income would become taxable at that point. C&R is a hobby. No income tax due on the sale.


    taxes could be an issue but.... If i collect 75 -100 firearms in my collection with a C&R, and 15 years from now i am going to liquidate my collection... auction houses are going to hit me with 10%-20% commission while state taxes as a ffl would be 7 1/4% as it stands right now. how many firearms can I buy and sell before the BATF considers my liquidation a business???
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  • mark christian
    There is no set limit because if the regulations were to give a specific number, say 50, then everyone would simply limit their "liquidation" to 49 guns. Do you want to be a gun collector or do you want to be a gun dealer? You can have individual FFLs for both activities but you cannot make one FFL perform both tasks. The regulations clearly state that you cannot obtain a Type 01 FFL for the purposes of enhancing your personal firearms collection nor can you use a Type 03 FFL in any sort of business activites. If you purchase firearms with a Type 03 FFL for resale, whether that sale takes place tomorrow morning or two years from now, you are in violation.
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  • slumlord44
    Definately no limit. You could liquidate a 1000 gun collection. That beingsaid, if you were to do something like that repeatedly, it could be questioned but might not be a problem. Say I collect 1000 Stevens single shots over a period of time and decide to sell them all and buy a large mumber of Winchester single shots. Legal and should not be a problem.
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