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Out of Business FFLs-- What Happens to Their Inventory?
There is a lot of confusing information on the web about disposition of an FFL's inventory when the dealer goes out of business. Even many attorneys are not aware of the actual regs.
In general, if the FFL was a sole proprietor, and if he/she logged out all remaining inventory to "personal inventory" (himself) when he turned his bound book into the OOB center, then, after a year's wait, the dealer can then sell his inventory privately, at gun shows, and to the public. This is the FEDERAL CFR at the time of this writing, but State laws vary. For example, in Ohio, there are laws that say handguns have to be sold to other FFLs. BATF is even more confusing-- four calls to four offices plus national industry relations gave us five different answers! Realize that ATF's official position is that they won't give a written opinion on an issue already "clearly covered" by the CFR-- and this one is considered to be in that category. Besides, the harried Atlanta group is taking up to 9 months to generate letters on issues they will opine on.
Even though 4473's are not required for private sales, the CFR gives specific regs about logging-- the former dealer has to keep a "bound book" of personal sales, listing the model, serial, and name, address and date of birth of the purchaser. He also cannot sell to anyone he "reasonably suspects" could not pass a background check (as in, buyers who say: "I'm glad you're private, I couldn't pass a check anyway..."). Other comments about DVs, mental issues or felonies would be equally "reasonable" for a denial by the dealer.
THE ABOVE IS NOT LEGAL ADVICE-- consult an attorney, the CFRs, or an ATF consultant for specific information about your situation. The NSSF has a number of outstanding resources-- such as Wally Nelson-- who can assist you on any specific questions you might have if you're going into, or out of, business.
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