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Old January 30, 2006, 08:32 PM   #1
craigntx
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an llc is fast track to get nfa items

i just found out, and im getting one
costs $275 for doc prep and filing fees
ill get it back in 2 weeks
then send the $5 or $200. depending on if i sbr, get f/a, or do an aow.
im gonna sbr my uzi mod a and maybe do a short barrel weapon for my rem 870.
the dealer says its faster this way than getting the cleo signed forms.
this dealer is republic arms on 34th in houston.
when i was there a guy picked up a sbr ar15
sweet!
craig
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Old January 30, 2006, 09:09 PM   #2
shaggy
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Fast track, yes, but it does have its drawbacks.

You cannot allow the corporation to lapse or cease to legally exist for any reason. That means filing all tax forms every year (even if all you have to report is a bunch of zeros), paying any annual fees to the state related to keeping the corporation current and alive, and filing any other annual forms your state may require. If the corporation ceases to legally exist you can be held criminally liable - remember the corporation is the registered owner, not you personally. I'd also strongly suggest (and it sounds like you have) that the corporation you use to hold your NFA weapons not be used for any other purposes. Since the NFA wepons are assets of the corporation, they can be used to satisfy debts and liabilities of the corporation. Also, just remember that only authorized officers or employees of the corporation who would not otherwise be prohibited from possessing a firearm can possess or use the NFA weapons of the corporation. In that vein, its a good idea to set out in the cert. of incorporation or the by-laws who the officers of the corporation are, and who is authorized to possess what (especially important if its going to be more than just you in the corportion - like your wife or S.O.).

And in case you didn't know, a corporation can only possess, make, or buy what an individual can possess, make, or buy. It is not a license to manufacture or a dealers license. Even as a corporation, you're still limited to transferable MGs, suppressors, SBR/SBSs, AOWs, and DDs.

FWIW, I've always considered going corporate more of a hassle than its worth IF you have a friendly CLEO who will willingly sign. True, the process is a bit shorter as a corporation, but as an individual, once I have an approved form 4 I'm done for the rest of my life. I don't need to worry about filing tax forms or paying franchise fees for the corporation every year - just another paperwork headache I avoid. Additionally, with the move of the NFA Branch to West Virginia, the time frame for all transfers has been getting much better. I wouldn't recommend forming a corporation and dealing with the additional paperwork and fees every year just to shave a couple weeks off a few transfers. If, however, you cannot get a CLEO to sign-off on your forms then its the next best step.
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Old January 30, 2006, 09:13 PM   #3
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If his CLEO is the Harris county sheriff's office forming a LLC/corp or trust is the only way. The politically appointed hack absolutely will not sign off on any NFA items.

The TX LLC is not too bad. $200 filing fee up front. No annual fee. Just have to send in the franchise tax report every year full of $0 if you do no business. If it is a multi-member LLC it is a little more complicated but still not too bad. You have to fill out a partnership income tax return every year for the IRS, but it's full of $0 too.
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Old January 30, 2006, 09:18 PM   #4
craigntx
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single owner corp
and ive heard its difficult to get cleos signature.
my dealer said the $200 filing fee is a one time shot and he indicated no other fees were involved.
can someone help me out on tx inc. costs?

i am beginning an investment business (flip houses) where i am sole proprieter.
so shaggy, are you saying this shouldnt be attached to my nfa ambitions?

and thanks for all the info- great
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Old January 30, 2006, 09:19 PM   #5
jcims
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Thanks for the reality check, Shaggy.

I have been corresponding with my local CLEO (Sheriff) to see if he will sign the Form 4 or not. He's sought the county prosecutor's opinion and is still thinking about it. After all this hassle, i feel like i'm painting a large bullseye on my back. (This is a small rural county) I'd been considering the LLC route...but this was a good dose of things i know i would screw up sooner or later.

The CLEO sign off may be painful, but if it gets done, it's done, and i don't have to live with the decision to do the LLC thing for the rest of my life. I'm assuming that even if you decide to dissolve the LLC, you'll till have to 'transfer' the goods into your own personal possession before you shut it down (or, of course, sell them)
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Old January 30, 2006, 09:21 PM   #6
craigntx
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oops dbl post
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Old January 30, 2006, 09:21 PM   #7
craigntx
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wow boofus you answered my qs when i was typin
lets go blastin sometime!
thanks im gettin excited
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Old January 30, 2006, 09:39 PM   #8
shaggy
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Quote:
i am beginning an investment business (flip houses) where i am sole proprieter.
so shaggy, are you saying this shouldnt be attached to my nfa ambitions?
Thats exactly what I'm saying. If you form an LLC for your NFA stuff, DO NOT use it for your business. First, if your investment business gets in trouble or you get sued, your NFA weapons could be used to satisfy debts and judgements against the corporation (they are, after all, assets of the corporation). If you don't use the corporation for anythig else other than holding your NFA weapons, you reduce your exposure to any such liabilities. Also, by using a corporation which you actively use for a business also for purely personal pursuits like collecting NFA weapons, you run the risk of weakening the corporate shield against personal liability. Thus if your corporation gets in trouble and sued, it can make it a little easier for a potential plaintiff to 'pierce the corporate veil' and go after your personal assets.

You're far better off forming two separate corporations - one for the investment business, and one for the NFA stuff.
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Old January 30, 2006, 09:51 PM   #9
shaggy
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Quote:
Thanks for the reality check, Shaggy.

I have been corresponding with my local CLEO (Sheriff) to see if he will sign the Form 4 or not. He's sought the county prosecutor's opinion and is still thinking about it. After all this hassle, i feel like i'm painting a large bullseye on my back. (This is a small rural county) I'd been considering the LLC route...but this was a good dose of things i know i would screw up sooner or later.

The CLEO sign off may be painful, but if it gets done, it's done, and i don't have to live with the decision to do the LLC thing for the rest of my life. I'm assuming that even if you decide to dissolve the LLC, you'll till have to 'transfer' the goods into your own personal possession before you shut it down (or, of course, sell them)
If your sheriff won't sign and you can't find another CLEO in your jurisdiction who will, then forming a corporation is the only way to go. You can, however, try to use the threat of forming a corporation to leverage yourself into a CLEO signature. Most CLEOs who won't sign think their approval is necessary. It isn't if you form a corporation. Thus, you can offer them the right to know what you're buying and when in exchange for a signature. If they refuse to sign, you can POLITELY inform them that you have other legal means to acquire your NFA weapons, in which they will never be able to find out what you are buying or when. If they want to know what may be lurking in their jurisdiction, they have to sign-off.

You also point out another drawback to corporate formation I forgot to mention. If you do form a corp. to buy NFA weapons and later decide to dissolve the corp, you have to sell or transfer the NFA weapons. Even if you just transfer them from the corp. to yourself (as an individual) you still have to do the whole NFA transfer process, including paying another transfer tax on each item.
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Old January 30, 2006, 09:55 PM   #10
craigntx
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ill just keep the corp till i sell said guns or die
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Old January 31, 2006, 08:20 AM   #11
craigntx
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oh and id rather bypass the cleo visit
i dont think that'd go too well
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Old January 31, 2006, 08:12 PM   #12
craigntx
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cant the c-3s be considered investments, and as long as i dont transfer more than is permitted per year, i wouldnt need a ffl?
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Old January 31, 2006, 10:39 PM   #13
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I'd rather just try to lead a movement and get petition signatures to force a de-annexation of my rural neighborhood from the city, forming my own city. I'll then of course make myself police chief of my new city. Then I get LEO stuff AND LEO prices.
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Old February 1, 2006, 09:43 AM   #14
shaggy
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Quote:
cant the c-3s be considered investments, and as long as i dont transfer more than is permitted per year, i wouldnt need a ffl?
Sure, but I'm not sure how considering the NFA items investments is relevant. There really is no limit on how many NFA items you can transfer per year without a license. As long as you do the NFA paperwork you're covered.
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Old February 1, 2006, 09:54 AM   #15
boofus
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On the forms I always put Company asset or something like that. Investment means you intend to sell it later for more money than you paid and some hair splitting agent smuckatelli at ATF might construe that to mean you are buying and then selling firearms for profit (i.e. a business). I can certainly see some leftwing crackpot like hitlery or kerry abusing it to imprison NFA owners for 'running a firearms business' without a FFL.
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Old February 1, 2006, 11:47 PM   #16
Legion2600
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As a single member LLC -- are the taxes done on a 1040 - schedule C?


This will be the first year for taxes on my Texas LLC.
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Old February 2, 2006, 09:08 AM   #17
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The CLEO signature can't be refused, unless you are under investigation.
Why would a CLEO sign the forms faster if it was a company?
The only good reason for a company I see if you want to sell all guns at one time or if you pass on and your son gets it this way easier.
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Old February 2, 2006, 10:12 AM   #18
shaggy
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Quote:
The CLEO signature can't be refused, unless you are under investigation.
Why would a CLEO sign the forms faster if it was a company?
The only good reason for a company I see if you want to sell all guns at one time or if you pass on and your son gets it this way easier.
Thats incorrect - the CLEO signature is completely discretionary and may be refused for almost any reason, or for no reason at all. In fact, they are often refused and other than finding another CLEO within your jurisdiction, forming a corporation is the only way around it. A CLEO is under no duty to sign the form 1 or 4 certification, absent some state or local law to the contrary. As far as a corporate transfer goes, the CLEO signature and fingerprinting requirements are inapplicable as the real applicant is a corporation, not the individual or individuals comprising the corporation.

Transfers would be the same as any other F4 transfer, however since a corporation can have an infinite lifespan, transfers to heirs can be somewhat easier - simply transfer stock to the heir or designee, so they can make themselves an officer or board member of the corporation (whoever is authorized by the corporation to possess and use the NFA weapons).
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