The Gun Control Act (18 U.S.C. sec. 923(d)) empowers the Bureau of Alcohol, Tobacco and Firearms the ability to regulate businesses engaging in firearms sales and service and sets out the federal firearms license requirements. Holding an FFL to engage in certain such activities has been a legal requirement within the United States of America since the enactment of the Gun Control Act in 1968. Before moving too far into the process, you should know that not everyone is eligible to obtain a federal gun license. In short, the ATF will typically approve an application if the applicant meets the following ffl requirements:
Is 21 years or more of age;
Is not prohibited from shipping, transporting, receiving or possessing firearms or ammunition;
Has not willfully violated the GCA (Gun Control Act) or its regulations;
Has not willfully failed to disclose material information or willfully made false statements concerning material facts in connection with his application;
Has premises (which in many cases can be your home) for conducting business or collecting for C&R; and the applicant certifies that:
The business to be conducted under the license is not prohibited by State or local law in the place where the licensed premise is located;
Within 30 days after the application is approved the business will comply with the requirements of State and local law applicable to the conduct of the business;
The business will not be conducted under the license until the ffl requirements of State and local law applicable to the business have been met; and,
The applicant has sent or delivered a form to the chief law enforcement officer where the premises are located notifying the officer that the applicant intends to apply and meets the federal firearms license requirements.
Secure gun storage or safety devices will be available at any place in which firearms are sold under the license to persons who are not licensees.
FFL holders are also required to keep a registry of firearms sales in an ATF-approved Bound Book, or a computerized equivalent using ATF-approved software. They must also maintain file copies of "Firearms Transaction Record" documents, for a period of not less than 20 years after the date of sale or disposition. When retiring or otherwise relinquishing a license, these records are sent to the BATFE's Out-of-Business Records Center. The ATF is allowed to inspect, as well as request a copy of the forms from the dealer during the course of a criminal investigation. In addition, the sale of two or more handguns to a person in a five business day period must be reported to ATF.
A lot of that was copied verbatim from the text of the Gun Control Act and sounds like a lot of legalese (which it is!) but luckily for us it's really not that complicated if you have someone that can just guide you through the process. Luckily, there are several inexpensive kits on the market that provide simple, step-by-step instructions to guide you through the process. Some even provide you the software you need to make sure your record-keeping is done correctly. Based on my experience, I like this Federal Firearms Application kit the best. It has everything you need to be successful - feel free to check it out.
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