My Colt distributer quoted me on a LEO only M4 with a 14.5 inch bbl. Now as an SOT I know I can buy and stock a LEO only weapon and use it for demos (this is a semi not select fire gun so letterhead isn't required). But why don't I need paperwork for it as an SBR? Is it because it's LEO only? I'll have no problems getting cops to try the gun out and get plenty of signed demo sheets, but the bbl length has me concerned. Is LEO only gun exempt from being registered as an SBR if it's owned by my company?

No.  If the barrel is only 14.5", and it doesn't have a permanent muzzle device or barrel extension to bring it over 16", then it must be registered as an SBR, and would come to you on a F3.

It also can't legally be sold that way to LE agency without being registered as an SBR and transferred to the agency on a Form 5.

It could be sold to an individual officer only with a letterhead authorization (for the LEO features) and on a tax-paid and approved Form 4 (if it was being transferred to the officer instead of the agency).

Will I need letterhead for it or will the distributor simply file an F3 and ship the gun after aproval? The sales rep told me all they needed was my FFl and SOT and did not nead CLEO letter. I just want to make sure this is done right despite what they say. And thanks in advance.

As a licensee, you don't have to provide a letterhead to acquire a LEO gun into your inventory.

In your case, distributor just files F3 with your FFL/SOT info and it comes to you when the F3's approved.

As it's an SBR, you'll need to F3 it to another dealer, or F5 it to a government agency, or F4 it to an individual officer with dept. letterhead authorization when you sell it down the road.

Thanks Circuits, that's what I thought.