Getting a class 7 FFL/class 2 SOT
If my main purpose is to do transfers/build AR's/sell & demo to Civilians, LE and Mil, I would need an 07 and an SOT, correct? Which do I apply for first what's the best way to do it and can an SOT do business out their home like an FFL can?
Also does it matter whether or not you are a private business/partner or an LLC? Is one better than the other in terms of getting an 07FFL or class 2 SOT?
OST. I'm trying to decide between an 01 and an 07 right now.
Yeah I'm pretty sure I want/need an 07 to build AR's to sale. I just want to go about it the right way the first time ya know. So I'm asking lots of questions and on lots of forums along with reading as much as I can in between time.
You'll need to get the FFL first. SOTs are FFLs, so if you can do business out of your home for Title I stuff, you can do it out of your home for Title II stuff. The SOT is just a blanket all-you-can-eat-for-a-year tax, as an alternative to $200 tax per inbound transfer; it doesn't grant you permission to deal in Title II firearms. Your FFL does that.
There are pros and cons to sole proprietorship or partnership vs. LLC or corporation. Sole proprietorship is simple and cheap. LLCs and corps provide a liability shield between your business and personal assets. As a manufacturer, I would think that liability would be an important consideration.
Don't forget about ITAR....
Good point I think I'll go the LLC route. And the ITAR, didn't know or hadn't heard anything about that until you mentioned it started reading and it seems that some 07's do it and some don't. I don't plan on doing any exporting or importing from anywhere but the good ol USA, but if I have to register with the ITAR then so be it. But at what point in the process would/should I apply for that? Is it an application for approval or just up front paid tax and your done...once a year?
The SOT and ITAR registration are both annual payments.
The order is:
- Get FFL in hand
- Pay SOT (fill out form, write check, mail it in)
- Register for ITAR, no need to wait for SOT it's a totally separate gov't program.
I'd worry about your business plan more, how many AR manufacturers are already out there? What unique aspect will you bring to the market?
Originally Posted By rcoers:
I'd worry about your business plan more, how many AR manufacturers are already out there? What unique aspect will you bring to the market?
Isn't there some actual need for some sort of proof of a plan to make a go of it, versus getting the licensure just so you can play with cool toys?
Originally Posted By Gthirteen:
Originally Posted By rcoers:
I'd worry about your business plan more, how many AR manufacturers are already out there? What unique aspect will you bring to the market?
Isn't there some actual need for some sort of proof of a plan to make a go of it, versus
getting the licensure just so you can play with cool toys?
No.
If that is your reason, you will be denied.
Originally Posted By Gthirteen:
Isn't there some actual need for some sort of proof of a plan to make a go of it...
Only if you're looking to borrow startup capital.
