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History of Federal Licensing

Posted on June 23, 2023 in

Congress enacted the Gun Control Act as part of the Omnibus Crime Control and Safe Streets Act of 1968. Dealers, importers, and manufacturers were required to obtain a license and pay the licensing fee. The Secretary of the Treasury was given authority to issue licenses and prescribe regulations. Many provisions of the Act remain unchanged. Today, the Attorney General is responsible for licenses and regulations. But all dealers, importers, and manufacturers must obtain and maintain a Federal Firearms License (FFL). Certain states require an additional license for firearms businesses operating within its borders.

Who needs an FFL?

Anyone who “engages in the business” of firearms must possess a valid license. That requirement appears straightforward but has been defined loosely by courts. Some of the relevant factors are frequency of sales and whether the business or individual was primarily motivated by profit. Businesses and individuals who sell firearms at gun shows or over the internet are not exempt from the license requirement.

How to Obtain an FFL

The Bureau of Alcohol, Tobacco, and Firearms (ATF) manages FFLs for the Department of Justice. This agency handles initial applications, mandatory inspections, and actions against the FFL. The first step in obtaining an FFL is identifying the appropriate entity for organizational purposes. Available options include collector, corporation, individual, and LLC. Entity formation should be tailored to the firearms business’s needs. Stone Rose Law can assist with this step.

The application process is perhaps the easiest part of holding an FFL. Applicants complete ATF Form 7/CR and pay a fee. Every year licensees must pay a licensing fee outlined by statute. Obtaining a license should be painless. But applicants who are granted a license must follow a complex set of statutes and regulations to avoid penalties and agency action against the license.

Common FFL Violations

Some of the most common FFL violations are listed below. A licensee places their business in jeopardy when they fail to comply with ATF regulations. The ATF can suspend or revoke an FFL when the licensee commits any number of violations. Licensees, depending on the violation, are also subject to civil monetary fines and criminal penalties. The ATF expects strict compliance with statutes and regulations. Generally, the ATF can inspect a licensee’s business once per year. Inspections rarely occur that frequently but licensees should be prepared for this scenario. Especially if the ATF noted serious compliance issues during past inspections.

  • Failure to accurately complete Form 4473.
  • Failure to conduct NICS background check.
  • Incomplete Firearms Acquisition and Disposition Books.
  • Failure to report multiple handgun and rifle sales.
  • Selling to a prohibited possessor.

Services We Provide

Licensees are not required to hire or retain an attorney. The public can easily access Forms 7/CR and 8. The true value of an attorney is protecting the licensee’s FFL from suspension or revocation, and ensuring the licensee is not subject to more frequent inspections, civil fines, or criminal penalties. Stone Rose Law provides a number of services designed to protect a licensee and their livelihood.

  • Business and FFL establishment- Establish the appropriate business entity and submit the license application to the ATF.
  • ATF compliance- Review completed Form 4473s, NICS background checks, Acquisition and Disposition Books, and other required filings to ensure compliance.
  • Notice of Intent to impose civil fine- Respond to the ATF when it issues a notice of intent to impose a civil fine.
  • Notice of Intent to Suspend- Respond to the ATF when it issues a notice of intent to suspend the FFL.
  • Notice of Intent to Revoke defense- Work with you to defend the FFL against a revocation action. Our attorneys will engage with their ATF counterparts, represent you in front of the Director of Industry Operations, submit petitions for rehearing, and pursue judicial review, if necessary.

Who is Stone Rose Law

Stone Rose Law represents firearm dealers, importers, and manufacturers in the state of Arizona – although we are proud to represent clients across the United States. Lead by experienced trial attorneys and military veterans, our firm has the knowledge, training, and experience necessary to obtain your FFL and ensure compliance with all applicable regulations and statutes, state and federal. Whether you’re starting a firearms business or have operated a successful business for years, give us a call at 480-498-8998 and experience the difference Stone Rose Law can make.