Pre May Dealer Sample in an LLC with FFLSOT

[mhawley]

Does anyone have experience with a PreMay Dealer Sample owned by an LLC that is licensed as an FFL and SOT. As I understand, an individual, who is a sole proprietor, and also is an FFL SOT owns a PreMay DS, and later lets the SOT and the FFL go, the individual can keep the PreMay DS as long as he is alive.  But if the dies, the PreMay DS must then be transferred to another FFL SOT, or the Government or Military.  If the dealer is an LLC (Limited Liability Company), and is registered as the FFL and SOT, and owns a PreMay DS, later drops the SOT and FFL, what would happen to the PreMay DS. Would the LLC be able to keep the PreMay DS, even though it was not an FFL with SOT, as long as the LLC remained active? This would seem to be the same case as the individual sole proprietor, except the LLC is an entity, and not a person.  And in theory, the LLC could go on indefinitely.

[riflejunky]

The NFA handbook is available online and offers answers to many commonly asked questions. It say this regarding your question, 
14.2.2 Corporations, partnerships, and associations. FFLs licensed as corporations, partnerships, or associations, who have been qualified to deal in NFA firearms and who go out of the NFA business, may lawfully retain their inventory of these firearms, including imported NFA “sales samples,” as long as the entity does not dissolve but continues to exist under State law. No NFA transfer occurs that
would require an ATF-approved transfer because the firearms are still possessed by the same entity to which they were previously transferred and registered. However, any firearm registered to the entity as
a “sales sample” would continue to bear the “sales sample” restriction on any subsequent transfer, unless the firearm is being transferred to a government agency. Thus, the transfer of a “sales sample” to other than a government agency will only be approved if the transferee is an FFL/SOT qualified such samples.220

[mhawley]

Thanks for the reply.  I had looked through the NFA Handbook, but must have overlooked that section.  I will go back and review again.

Many thanks.

M.

[Armydoc0115]

My wife and I decided to be 01/03s as an LLC.  She’s also an attorney.  What was said above is absolutely true.  You can cease business as an FFl, but can continue to have the LLC recognized as an active, existing legal entity UNLESS you specifically designed the LLC as being for firearms.  What most people do to get around that is define their LLC as existing for “any lawful purpose.”  That way if you decide you no longer want to deal in firearms and you want to sell shoes instead, you don’t have to create a whole new LLC.

 

But yes, your LLC can retain the dealer samples even after you give the FFL.

-David

 

[mhawley]

Thanks for the information!  

M Hawley

[johnsonlmg41]

In theory LLC's do go on indefinitely, however many states limit the lifespan of LLC's.  You need to check the state's laws in which you have it set up in addition to checking your articles of organization (which can also limit the lifespan your entity).  Yes the pre-may's can be kept by any entity or individual after giving up an SOT.

[Ryo]

Probably this part doesn't fall under you, but I had actually asked the question to the ATF.. but for a different purpose which I didn't get a satisfactory answer..

My understanding that the business has to continue existing and must not be dissolved even if giving up the FFL/SOT which answered part of my question if I die and my family continued the business without the FFL/SOT..
My issue is I'm in a state where MG's are not legal unless grandfathered in. If I gave up my FFL or just my SOT, I didn't know if I would be in violation of state law.. The NFA branch pretty much told me to contact the Attorney General and get an answer from them.. but of course I never got a answer back from them.