Applying for an FFL: Sole Proprietorship or LLC?

**BigCountry** · August 16th, 2010, 12:10 PM

Looking to apply for my FFL but I'm not sure whether to apply for an LLC, or go with a Sole Proprietorship. I have everything in line and ready to go.. I'm just not sure which route to take. Anyone with an FFL care to educate a young pup?

**rflynn** · August 16th, 2010, 12:17 PM

Talk to your Tax people and see what works best for you. Do you have a place of business (store front or home)?

**s&wpat** · August 16th, 2010, 03:07 PM

I am in a completely different business but my lawyer had me setup a S-Corp for my small business. By his explanation a S-Corp and LLC are not very different except the corporation provides a little more protection.

**BigCountry** · August 16th, 2010, 04:14 PM

I plan to run if out of my home. If it takes off, I'd make the jump and move to a commercial property. But then I realize I'd also have to reapply for the FFL.

I'll look into the S-Corp, thank you for the suggestion.

**mojo** · August 16th, 2010, 04:44 PM

Personally, I would stay away from S-Corp but that's just me. I would go with the LLC. It's not really going to offer you much or anything over a sole prop though.

**Xringshooter** · August 16th, 2010, 06:54 PM

It was explained to me that if you set up as a Sole Proprietorship, and something bad happens, they can sue and possibly take everything you own if you don't have enough insurance. Under an LLC they can only take what belongs to the business (bank account, tools, etc., whatever is in the business name), they can't touch your personal property.

**s&wpat** · August 16th, 2010, 09:22 PM

Mojo....May I ask why you would stay away from a S-Corp? I went that direction upon suggestion from my lawyer.

**BigCountry** · August 16th, 2010, 09:29 PM

Yeah, they LLC is looking to be the more attractive option. I'm just worried about the fees. I'm hoping that I'll make enough to cover the annual fees (Roughly 300+ a year) and an initial start up fee of 125. Which.. seems simple enough, but I guess I'm a penny pincher.

**rflynn** · August 16th, 2010, 09:59 PM

Please do yourself a favor and talk with a Lawyer and a accountant.

And you will have to do more than come up with $300.00. It is not $300.00 a year for an 01 FFL .I am not sure where the 125 is coming from.