Federal Firearm License: What Is It And How Can You Become an FFL Licensee?

A high demand coupled with less competition makes the firearm business an attractive option for businesses planning to set up their startup in the weapon industry. However, selling, manufacturing, and importing weapons and ammunition require a federal firearm license. It’s a mandatory requirement for US residents planning to launch their firearm business. The good news is that starting a firearm business requires just the FFL, a credit card processor who accepts high-risk merchants or those dealing with weapon and ammo products, and $200.

Issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, these license holders can transfer, manufacture, and sell guns and all kinds of weapons within or outside the state. Keep reading to learn more about FFL, its significance, and the steps for obtaining it.

An Overview of Federal Firearm License

As mentioned above, an FFL certificate gives you the legal right to sell firearms, manufacture weapons, and sell them internationally. In the US, the Gun Control Act of 1968 governs the use, purchasing, manufacturing, distribution, and all processes associated with the firearm industry. The act mandates each firearm owner or producer to possess the Federal Firearm License to be considered legally responsible for the use of firearms.

FFL can be classified into different types, each specifying the use of the weapons. For instance, you can have the license to manufacture guns, or an FFL might just allow you to transfer it between two parties, also called FFL transfer. The license ensures that each employee that works for the firearm company, the owner, and their distributors meet the safety standards.

Note that this license is not issued to those who want to add weapons to their firearm collection. Using any kind of weapon, manufacturing ammo, or importing them without legal permission will result in a fine with jail time. You might have to shut down your business. Moreover, all the weapons you have used without the license will be forfeited.

The firearm regulations vary from state to state. It’s possible that some states might make it mandatory for the buyer to obtain permission before purchasing weapons from you.

Are You Eligible for the Federal Firearm License?

ATF is responsible for verifying the applicant’s background and the purpose of obtaining a Federal-Firearm License. They can accept or reject the application based on whether the applicant meets the following criteria.

• They must be US citizens
• Above 21 years
• Have not engaged in any serious criminal activity
• Are not associated with cannabis manufacturing, distribution, or its illegal use
• Are legally allowed to use the weapons
• Comply with the federal and state requirements for possessing firearms

These were just to name a few. You must consult a lawyer or ATF to learn more about the eligibility criteria for obtaining a firearm license. In addition, you must prove that the business you are engaged in is not prohibited by your local and state laws and that all transactions made using the license are strictly in compliance with the state laws.

You must also have a safe space to store weapons. Those who do not meet the above-mentioned eligibility criteria or any specific legal requirements imposed by the authority won’t be issued the FFL. However, these individuals can still sell the weapons at gun shows.

How Can You Get Your Federal Firearm License?

Once you have researched the comprehensive eligibility criteria for FFL and are certain that you qualify for the license, the next step is application. In this post, we have listed the detailed steps for applying for and obtaining your FFL. Let’s take a look.

Understand the Requirements First

The eligibility criteria to purchase and set up a firearm business is listed above. Although most people who are 21 years old or above and are involved in a legal business will qualify for FFL, it’s best to go through the requirements carefully before applying. Sadly, ATF has prohibited certain people from using ammo or guns for any purpose. If you meet any of the following conditions, you won’t be granted the Federal Firearm License.

• A criminal or a history of attempting serious crimes
• A non-resident of the US
• Diagnosed with intellectual disability
• Conducted a crime that led to a 1-year jail sentence.
• Conducted domestic violence
• Illicit user of drugs, chemicals, and other controlled substances
• Got a dishonorable military discharge (for conducting a serious offense)

These were just the standard requirements that apply to each state. To learn more about FFL eligibility, it’s advisable to go through the detailed requirements in your state.

Choose the Type of the License

As mentioned before, FFL comes in different types ranging from FFL 01 to FFL 11. Each is for different gun and ammunition users. Since each license gives you specific permission, it’s important to understand them and apply for the one that fits your requirements. The 01 FFL, for instance, is for those who just want to sell firearms. Type 07 is for the manufacturers and the dealers. If you intend to manufacture and distribute the weapons, you will need a type 07 FFL.

To obtain the dealer license, you must apply for 01, 02, 03, and 09 firearms licenses. The 06, 07, and 10 FFL are for the manufacturers of firearms. Apply for these licenses if you want to set up a manufacturing business for destructive and non-destructive weapons. Lastly, those interested in importing the weapons from overseas need 08 and 11 FFL.

Those requiring a license for NFA weapons including shotguns, rifles, and machineguns must complete their SOT registration. That’s also categorized into three types, each catering to different businesses. SOT registration is considered valid for a year starting from July 1 to June 30 and can cost anywhere between $500 and $1000.

It’s important for the dealer, manufacturer, and importer of NFA firearms. You must choose the SOT based on the Federal Firearm License type you have got. For instance, SOT Class 1 is for the applicants applying for FFL types 8 and 11, while Class 2 is for FFL types 7 and 10.

Let’s understand the FFL types and the legal permissions you get for each from this table.

To understand more about different classes of SOT and types of Federal Firearm License, you must enroll in an online FFL class. Understanding what each license allows and then applying accordingly will ensure a faster approval process and fewer issues.

Sign up for an Online FFL Course

While the process of obtaining an FFL might seem as simple as sending your application to the ATF, it’s quite difficult. You must be aware of the new regulations from the ATF to ensure that you qualify for the Federal Firearm License. Fortunately, the FFL certification courses are there for your rescue. These are designed to ensure that you understand all eligibility requirements and legal responsibilities that come with this license.

They also help you know what all permissions you get from the SOT registration and the FFL type you register for. However, with so many certification programs on the internet, it might be hard to choose. So, the best you can do is look for a course that offers advice from an experienced and licensed attorney, a professional who has the fundamental knowledge of different FFL courses, and those offering compliance training to you and your employees. Here’s what to look for when choosing the right FFL course.

• Detailed, step-by-step instructions on different FFL types and the process of obtaining the license.
• Developed by professional and licensed firearm attorneys
• One-on-one advice available
• Certification after the course completion
• Automatic updates and notifications for amendments in the legal requirements
• Advanced course training
• Access to the free compliance tools

Once done, you are all set to apply for the federal firearm license.

Apply for the FFL

After choosing the FFL type and SOT class, you can move on to the application process. You need to pay the required fee to have your application reviewed. The application might look pretty overwhelming, so below we are presenting a breakdown of the FFL procedure.

Complete the Application Forms

Form 7/7CR is used for applying for different FFL types, including manufacturing and importing licenses. The form asks for your basic details, like the applicant’s name, social security number, residence, aliases, title, birthplace, email address, etc.

The next section consists of a set of questionnaires that you have to answer with yes or no. To determine your eligibility for the Federal Firearm License, the ATF will evaluate your answers to these questions and then accept/reject your application based on that.

Attach your photo and fingerprint form to the 7/7CR form. The fingerprint and photo are not necessary for those applying for the FFL type 03. For this, you only get the license to collect and store firearms and their components, but can’t sell, manufacture, or import them. The photo must be clear, 2×2 inches, and show your full face.

Background Check

The FFLC (Federal Firearm License Center) will carefully review your application and run a background check to ensure you meet all the federal regulations. They will record all information mentioned in your application to identify its accuracy. They will review each person mentioned in the form. Once it’s done, they will send your application form to the ATF office, where the Industry Operations Investigation (IOI) will see your case and schedule an in-person, one-on-one interview to understand your requirements and the purpose of applying for the firearm license.

At this point, they will make sure you run a legal business. Their main goal is to ensure you are a responsible candidate and will use the weapons for legal purposes only. Before the IOI interview, you must prepare for it beforehand. For instance, knowing the different types of Federal Firearm licenses, their uses, and SOT can be helpful for the interview.

The knowledge of federal, state, and local law is also crucial, as the IOI might want to know if you are up-to-date with the legal requirements related to firearm use. They might also ask about the storage and its safety. Having a gun safe is not a necessity, but it’s advisable to have one just to make your application stronger and have it approved quickly.

Depending on the type of FFL you are applying for, the IOI will visit your premises to check the location in person and ensure that the storage and your business operations are in line with the state laws. They will mostly discuss the laws and review your application to double-check whether the information is correct and current. Once they are satisfied, they will create a report where they recommend the approval or rejection of your application.

License Issuing

After the interview, you need to wait for the ATF to issue your firearm license. During this period, you can set up other business-related operations, like finding a suitable payment processor who can accept your credit card payments. That can be a bit tricky, as payment processing providers do not work with high-risk companies.

And considering the nature of this business, it’s obvious that you might face difficulty finding a payment service provider. So, research well and collaborate with a processor that can help you set up your payment system for the online firearm business. You may have to wait for one to two months for your application status to change. ATF can take up to 60 days to accept or decline your application.

The Cost of FFL

FFL is considered valid for three years from the issuing date. So, it’s important to have it renewed before it expires to continue your firearm business. The application fee for this license varies depending on the type of FFL you need. Each comes with a different issuing and renewal fee, which is determined based on your business type and the level of permission you are seeking.

For instance, an applicant applying for a 03 FFL type will pay as little as $30 in issuing and $30 for renewal. The same for the 09, 10, and 11 FFL types is $3000 for issuing and renewal. Type 01 and 02 incur $200 in issuing and $90 in renewal. The 07 and 08 FFL types pay $150 each for issuing and renewal. Unfortunately, that’s not the only fee you pay to obtain the Federal Firearm License.

If your application is approved and your license is issued, you will pay the DDTC registration fee of $2,250 per year. In addition, the exercise tax is mandatory for the manufacturers of firearms, especially those who have designed more than 50 pieces in a year. You are charged 10% or higher on the total value of your manufactured weapons. You can avoid it by limiting your firearm production to 49 annually or making it more than 60-70 so that it’s worth paying a tax on weapon manufacturing.

Fingerprint Requirements

You may also need a fingerprinting kit or you can get the fingerprint identification card from the ATF distribution center and attach a report of it to your application form. Additionally, you might have to pay for training courses that you pursue either online or in person. The National Firearm Examiner Academy provides you with the required training for firearm users.

Get Your License

Once you have completed the above steps and your application is approved, you should get the approval letter through mail within 60 days of applying. You can call the ATF to get a status if it’s taking longer to respond.

Important Instructions

The post covers nearly all aspects of obtaining a license for firearm selling, manufacturing, and importing purposes, but there are some other considerations you must keep in mind when dealing with weapons.

• It is not allowed to carry concealed weapons using the FFL certificate. For that, you need CCW (Carrying a Concealed Gun) permission.
• The ideal FFL type depends on the purpose of getting a license. If you are planning to manufacture the guns and sell them, the type 07 is your best bet. Make sure to explore and understand each option before making a decision.
• It’s possible to get an FFL for your personal use, only if you apply for a business license first. Simply put, you must apply for FFL for a business purpose and then use it for your personal purposes (so long as they are aligned with the state and local laws).

Conclusion

Obtaining a Federal Firearm License is the first requirement of running a firearm or a weapon business. Before you proceed with the application, check with your local and state authorities to learn the firearm regulations in your state and different types of FFL. The above tips will help you set up your own firearm business, whether it is manufacturing, selling, or importing the weapons.