The process for purchasing or transferring an NFA/Title II firearm is streamlined a bit when it’s done by an entity (a corporation or trust) rather than an individual.
Here are some things to consider when deciding between a corporation (generally a Limited Liability Company (LLC)) and a trust:
Corporation (LLC):
- Initial costs to legally create the entity
- Must have a business purpose (profit)
- Registered with the state of Florida, so it’s public information
- Annual reporting and associated costs
- Certain legal formalities must be followed to ensure the entity isn’t considered a “sham” – an entity not truly legally separate from its creator
- May provide some limited liability (only assets in the LLC are at risk) as long as the entity isn’t considered a “sham”
Trust:
- Initial costs to legally create the entity
- Private entity – not registered anywhere
- No annual reporting or ongoing legal formalities
- Does not provide any liability protection
Generally, for individuals who are not buying or possessing firearms for a business enterprise, a trust is the better choice. It’s private and easily modified.
