Gaujo

Pre 86 Samples owned by a Corporation

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Ok, so I read somewhere that if you get your SOT through a corporation, and your corporation acquires pre 86 samples, and then gives up the SOT, that that corporation can continue to own them as long as it is maintained. 

Q1:  Is this true?

Q2:  If that's true, can't I sell the corporation and the holdings to a citizen? 

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Q1: Yes

Q2: yes, but check with BATFE on the current corp regs regarding responsible persons.  

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Later down the road...if you decide to sell anything, and the corporation is not a current SOT, then I believe there will be a transfer tax to the buyer.

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3 hours ago, Trident Rifles, LLC said:

Later down the road...if you decide to sell anything, and the corporation is not a current SOT, then I believe there will be a transfer tax to the buyer.

Why wouldn't there be?  It would be no different if the seller was an individual who gave up his SOT.

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But what if the corp itself was sold? I was under the impression that because the items are owned by the corp, the new owner of the corp would not need SOT.

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Thinking about the question and some items being Pre86 Dealer Samples.

The original Corp purchases the items as an FFL/SOT.

If the Corp is sold, then the items would need to transfer to the new Corp and New owners (same Corp name, but different responsible persons).

If the new owners and Corp do not posses an FFL/SOT, then the Pre86 D.S weapons would not be able to be transferred (this is my thought).

The original Corp that has given up their SOT has every right to keep the items, however once ownership changes, it must be to another current SOT holder.

That is my thought and believe me, I could be wrong. This is a good question and I hope someone with personal experience, can elaborate so we can all learn.


Dennis Scheid: Owner of NFA Investments and www.investmentguns.com

FFL/SOT Class III (63) Dealer in Portland, OR. Since 2005 

Cell #’s 503-720-2280 or escheid@comcast.net

We specialize in Heckler & Koch weapons, Colt M16’s and Pre 86 Dealer Sample weapons.

All items posted for sale, are in our inventory and NFA items are on Form 3’s ready for transfer.

 

 

 

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2 hours ago, Dscheid NFA Investments said:

Thinking about the question and some items being Pre86 Dealer Samples.

The original Corp purchases the items as an FFL/SOT.

If the Corp is sold, then the items would need to transfer to the new Corp and New owners (same Corp name, but different responsible persons).

If the new owners and Corp do not posses an FFL/SOT, then the Pre86 D.S weapons would not be able to be transferred (this is my thought).

The original Corp that has given up their SOT has every right to keep the items, however once ownership changes, it must be to another current SOT holder.

That is my thought and believe me, I could be wrong. This is a good question and I hope someone with personal experience, can elaborate so we can all learn.

There wouldn't be a new corp.  It'd be a stock/share sale.  The original entity remains intact and owner of corporate assets.  The scenario you outlined would be the sale of the corporate assets.  OP's question was relating to sale of corporation itself, which means the stock/shares of the corporation. 

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On ‎3‎/‎10‎/‎2016 at 0:52 PM, Gaujo said:

Q2:  If that's true, can't I sell the corporation and the holdings to a citizen? 

WC, he actually did mention selling the Corp and the holdings. (same Corp name, but different responsible persons).

and if that were the case, then any new owners of said Corp would need to go thru the NFA for proper ownership, correct?

I really hope someone with experience can shed some light on this one!


Dennis Scheid: Owner of NFA Investments and www.investmentguns.com

FFL/SOT Class III (63) Dealer in Portland, OR. Since 2005 

Cell #’s 503-720-2280 or escheid@comcast.net

We specialize in Heckler & Koch weapons, Colt M16’s and Pre 86 Dealer Sample weapons.

All items posted for sale, are in our inventory and NFA items are on Form 3’s ready for transfer.

 

 

 

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Going to assume you have filed your S-Corp/C-Corp paperwork with the IRS and also with ATF NFA Branch too! This is diving deep!

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I see where you're coming from.  My interpretation of that question was that the corporation would be sold in its entirety, and the assets of the corporation would go with the sale as corporate property.  Meaning that the assets themselves are not changing ownership.  It's the owner ship of the shares of the corporation that is changing.  Now If the corporation were to sell a pre-86 sample asset, then all normal transfer restrictions would apply, in my opinion.

As far as the change of "responsible persons", as ATF puts it, that's a new ball of wax that everyone is waiting and watching to see how it rolls.  Going by the drafts of new Form 4's someone linked to, it seems that ATF will now require notification of ownership changes and would require new owners to submit photos and prints.  I suppose we'll be seeing soon enough

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This is one of the reasons the ATF was so concerned about the trust, LLC and Corporation transfers and registrations. You can sell any of them without a transfer taking place and therefore allow the transfer of NFA without notifying NFA or getting any background checks done. The answer to your question (original poster) is likely that you could sell the corp to an individual with no transfer taking place. Its not intended to be legal according to the regs but the difference between corp (LLCs are corps for the purpose of NFA), trusts and normal individuals is something more regulated by the states than the NFA. A Corp is legally an individual so you're not really transferring anything other than an individual. I'm sure there is some legal basis for doing exactly what you suggested even though the regs clearly state that pre-may samples cannot be transferred to individuals, only to SOT holding FFLs. I believe there were sales of other NFA holding corps and trusts over the years when they became popular and no transfers through NFA branch. As an Corporate FFL holder you can legally sell and transfer the corporation to whoever you want but by law the FFL cannot be transferred to the new owners....they must obtain their own if they wish to continue. On the other hand there isn't such clear information available on the transfer of firearms held by Corps or trusts. 

Basic real answer for you is that you should really consult an attorney well versed in NFA and firearm law to get your answer. Asking us is great fun because it can create some interesting arguments and ideas but like any other free info its worth only what you paid for it.


Good luck

Frank

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I have a similar question.  I am listed as a "responsible person" on a FFL/SOT for a Subchapter S Corp.  I am not listed as an officer on the S-Corp.  My concern as it relates to pre-samples is as follows. 1.)  Keeping any Pre-samples if the SOT is ever given up.  2.) Keeping a sample at home vs the shop.

Anyone have insight on this?

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Posted (edited)

55 minutes ago, Elduque said:

I have a similar question.  I am listed as a "responsible person" on a FFL/SOT for a Subchapter S Corp.  I am not listed as an officer on the S-Corp.  My concern as it relates to pre-samples is as follows. 1.)  Keeping any Pre-samples if the SOT is ever given up.  2.) Keeping a sample at home vs the shop.

Anyone have insight on this?

Well in your example you could never keep the pre sample, or keep it at home. It's not your gun. It could be kept by the S Corp. your home isn't a storage location for the s corp(unless maybe you own the retail or office space where the s corp is registered). You still can't "keep" it at home, when I was listed on the FFL as a responsible person I was able to transport the guns for say like a gun show or event, and some times I'd pack up the night before and the gun would stay in my truck locked in the garage because we were leaving at 3am the next morning. But they would be returned to the shop on the next business day we were open. 

*edit to add I'm not a lawyer, and did not stay at a holiday inn express last night. We did have a firearms attorney on retainer, and he said what we did was up to his legal opinion as kosher. But your best bet is talk to the companies lawyer as they are the ones with their ass on the line. But some for you as well as you are a signer on the FFL. 

Edited by damcv62

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This does get interesting on the sale of the stock vs assets of what ever entity holds the FFL and NFA items.

It would seem to me that in a stock sale all assets would go with the stock if not sold prior to the stock sale and no transfers would be necessary.

What would be necessary, unless the corporation is not changing it's physical address, is to submit a change of address of the corp. to the BATF.

Along with the move and notifying the BATF would be to make sure that where ever the Corp is moving to is zoned properly for a firearms business.

I know this because last year I sold my commercial bldg. and moved my FFL to my home, BATF wouldn't approve the move without the cities blessing

which I was able to get but BATF didn't notify me that they wanted the cities input for almost a month.  BATF agent called me at 6:30 pm on Fri. and asked me where

I lived as the zip didn't match the cities name, well we don't have a post office but have 4 different zips for the city I live in.  So this was another hold up.

I confirmed that my physical location and the post office were different, he called BATF Atlanta and I had my FFL the next Tuesday, with the post office town listed

on my FFL, not the city I live in, so much for them wanting the correct physical address, Damned if you do or don't.

The responsible persons thing might need to change also.

Spend a couple bucks and have a lawyer review the sale.  Good luck. 

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