I am a former FFL but, never an S.O.T.  I now live in a more rural area and I am working with an existing FFL.  His FFL is as a sole proprietor.  To expand his business and build some of my own, I would like to work with feral hog hunters seeking suppressors.  Our area is under served for Class 3 dealers so, transfers would be all his as well as any SBR, AOW, etc. that he might want to bring in.


Does a FAQ or similar documentation exist to let us know the current rules for legal compliance since I will not be on his license?  Essentially what I would like to see happen (and the dealer is fine with this), is I pay the S.O.T. and arrange all suppressor orders and cover inventory costs.  He gets a cut for storage and paperwork that requires his signature.  Demos on Saturday afternoon at his range are pretty easy but, on escorted night hunt demo's I would need to 'check out' a demo can and would not return it until the next day.




How do we handle the legalities or, is this even possible under the current rules?  Since I would not be a direct salaried or hourly employee of his, how does this change things (assuming a 1099 'contract employee' situation)?


 

TIA,

Sid

I am no longer an FFL and was never an SOT, but I will tell you my opinion.

I think you could be added to his FFL as a "Responsible Person".  You have to pass a background check and submit some paperwork.

An alternate would be to get your own FFL/SOT at his location

Of course you are on his license ! If you are engaged in the firearms Busniess @ his location he is Responsable for everything that goes on.
You are either an employee or partner. By the description you gave I would think ATF is going to consider you a partner which makes you just as liable as he is for everything that goes on there and most likely requires notification to ATF. The ATF cares not for what type of legal entity the Busniess was started under. They care about compliance.
If you are an employee that works for commission you are still under his license. Commission only people work in all kinds of Busniess environments. The fact that you paid for nessassary licensing and inventory will most likely be viewed as you are a partner. if you want to hide from the appearance of being a partner.. then never leave a paper trail that shows you paid for licensing or inventory.  In or out ?

OP you will find the answers you seek here:
https://www.atf.gov/files/regulations-rulings/rulings/atf-rulings/atf-ruling-2010-1.pdf
Short answer: you can either be a W2 employee under his license, or a 1099 contractor with your own FFL.

First so their is no confusion or questions about intent, I am not and have no desire to hide anything from the ATF.  My goal is to be totally transparent and legal with everything.  A $200 FFL application and $500 S.O.T. is not worth the grief that comes from trying to avoid compliance or skirting the rules.  Legal proceedings and fees, potential jail and fines, hours spent on legal compliance paperwork, etc. is not worth $700 to me.  I will do it correctly or not at all.

 
Thank you Bubbles!  That clears up normal non-NFA items, at least until 'universal background checks' become a compliance requirement.






I may have missed something but, I did not see anything regarding NFA related temporary transfers.  It appears that a 1099 contractor would be required to a complete transfer on non-NFA so, this appears to stop any NFA demos by a 1099 contractor without the S.O.T. holder.






If I have my own FFL/SOT, that covers me for the suppressors but, it doesn't allow him to handle transfers and would tie all business back to myself exclusively.  Hmmm, I guess I could still give him commissions and 'rent' some floor space and, perhaps that is simplest for both of us.  The W-2 employee option is another possible answer but, that is a lot more paperwork and book keeping.  



 
 

The appearance is that you want the cake and eat it too ! Unfortunately the regulatory issues involved are going to cause some headaches for both of you not to mention the potential issues of having 2 different FFL entetys in the same location. If you went that way...
One small slip up keeping it all straight and one PITA ATF compliance person doing a check could be quite problematic. You get the wrong compliance person and it will be a nightmare. I have been there with no slip up. Just a PITA compliance person looking for anything they could use against us. An attitude of there is always something wrong with these guys and I will find it.

The guidance is very clear: unless you are doing gunsmithing on the NFA firearms, you will have to F3 them to your own FFL/SOT if you want them in your care, custody, and control for demonstrations.

The process is clean and stupidly easy for you if you are an employee of your friend's business.  He will have to deal with the headaches of having an employee if he wants to move forward.

 
I somewhat agree with the ever changing rules and policy interpretation changes and luck of the draw with whoever shows up to do the compliance audit.  Most of mine were done by very professional people trying to do a reasonable job but, I had a few encounters with agents who were real @#$holes and as you note, looking until they found something.




I even had one agent tell me I shouldn't be able to own what I do as a civilian in her opinion.    I guess it was a good thing she wasn't approving my Form 4's.