Licensing of Trusts under Federal Firearms Laws
Only a “person,” as defined by the Gun Control Act of 1968 (GCA), 18 U.S.C. Chapter 44, can obtain a Federal Firearms License (FFL). Under the GCA, 18 U.S.C. §§ 922(a)(1) and 923(a), no person may engage in the business of importing, manufacturing or dealing in firearms, or importing or manufacturing ammunition, until that person has filed an application with and received a license to do so from the Attorney General. The GCA provides that “[t]he term ‘person’ and the term ‘whoever includes any individual, corporation, company, association, firm, partnership, society, or join stock company.” 18 U.S.C. § 921(a)(1). The term “person” does not include trusts.
A trust can be created in various forms. However, the characteristic common to all trusts is the separation of legal and equitable title to property with legal title held by the trustee and equitable title held by the beneficiaries. As stated above, “person” in GCA includes the following legal entities: corporation, company, association, firm , partnership, society, and joint stock company.
Generally these entities are organized for the purpose of carrying on a commercial enterprise or profession, and often have business lecenses to support their operations. Although a trust holds and can manage property, and the trustee may acquire and dispose of property held in trust, the puspose of the most all trusts is not to carry on a trade or profession. With a trust, the trustee has a fiduciary obligation to enforce the instructsions set forth in the trust agreement for the benefit of third persons. The parties (i.e. contributor/settler, trustee, and beneficiary) are genearally not associated with each other to carry out a commercial enterprise or profession.
After evaluating the issue, ATF has determined that trusts that are not lawfully incorporated and registered with the applicable State pursuant to State law may not obtain a license under GCA. Licensees should contact the Federal Firearms Licensing Center (FFLC) and/or the applicable field division for additional information concerning issuance of an FFL to a trust.