Document Type	Internal Legal Compliance Reference
Applicable Jurisdiction	State of Texas & Federal (ATF / 18 U.S.C. § 921 et seq.)
FFL License Type	Type 01 — Dealer in Firearms (Handguns & Long Guns)
Revision Date	2025
Status	DRAFT — Pending Legal Review

 

1. Purpose & Scope
This Legal Compliance Policy establishes the standards, procedures, and obligations that govern the lawful operation of this federally licensed firearms dealership in the State of Texas. As a licensed Federal Firearms Dealer (FFL) under 18 U.S.C. § 923, this business is required to comply with all applicable federal laws administered by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), as well as Texas state firearms statutes.

This policy applies to:

• All owners, employees, and contractors engaged in firearms sales, transfers, or storage
• All retail transactions involving new and used firearms
• FFL-to-FFL transfers and out-of-state transfer procedures
• Recordkeeping, inventory control, and ATF inspection compliance
• Online sales facilitated through third-party platforms requiring local FFL transfer

 

2. Federal Firearms License (FFL) Requirements
2.1 License Maintenance
The business must maintain a valid FFL issued by the ATF at all times. Operating as a firearms dealer without a current FFL is a federal felony under 18 U.S.C. § 922(a)(1). The following obligations apply:

• License must be posted conspicuously at the licensed premises
• Renewal applications must be submitted at least 90 days before expiration
• Any change in business address requires immediate ATF notification and amended license
• Change of responsible persons (RP) must be reported within 30 days via ATF Form 5300.38

2.2 Responsible Persons (RP)
All responsible persons must complete ATF Form 5300.38 (Responsible Person Questionnaire) and be vetted accordingly. No individual prohibited under 18 U.S.C. § 922(g) may serve as a responsible person or have access to the licensed inventory.

 

3. Background Check Procedures (NICS)
3.1 Brady Handgun Violence Prevention Act Compliance
All firearm transfers — handguns and long guns — require a NICS (National Instant Criminal Background Check System) check initiated by the FFL prior to transfer. In Texas, there is no alternative permit that bypasses NICS for retail sales.

3.2 ATF Form 4473 — Firearms Transaction Record
ATF Form 4473 must be completed for every firearm transfer. Requirements:

• Buyer must complete Sections A–C in the presence of the dealer
• All information must be legible and unaltered; errors must be corrected per ATF instructions
• Dealer must verify photo ID: government-issued, unexpired, with name, address, date of birth, and photo
• For Texas residents: a Texas Driver License or Texas ID is the standard acceptable ID
• Form 4473 must be retained for a minimum of 20 years from date of transfer
• Denied or cancelled transactions must still be retained (retain for 5 years)

3.3 Proceed / Delay / Deny Outcomes

PROCEED	Transfer may be completed immediately.
DELAY	FFL may transfer after 3 business days (Brady Rule).
DENY	Transfer is prohibited. Buyer may appeal.

4. Prohibited Persons — 18 U.S.C. § 922(g)
No firearm may be sold, transferred, or provided to any person who is prohibited under federal law, including:

• Persons convicted of a felony (crime punishable by more than 1 year imprisonment)
• Persons under indictment for a felony
• Domestic violence misdemeanants or those subject to qualifying protective orders
• Unlawful users of or addicted to controlled substances
• Persons adjudicated as mentally defective or committed to a mental institution
• Illegal aliens or persons admitted under nonimmigrant visas (with limited exceptions)
• Persons who have renounced U.S. citizenship
• Persons dishonorably discharged from the U.S. Armed Forces
• Fugitives from justice

 

5. Minimum Age Requirements

Handguns (pistols & revolvers)	Minimum age: 21 years — Federal law (18 U.S.C. § 922(b)(1))
Long Guns (rifles & shotguns)	Minimum age: 18 years — Federal law (18 U.S.C. § 922(b)(1))
Texas — Handgun License (LTC)	Minimum age: 21 years (Texas Gov. Code § 411.172)
Body Armor	No federal minimum age; no Texas state restriction for purchase
NFA Items (suppressors, SBR, etc.)	Minimum age: 21 years for all NFA-regulated items

 

6. Texas State Firearms Laws
6.1 Open Carry
Texas law (Texas Penal Code § 46.02, as amended by HB 1927 — Permitless Carry, effective September 1, 2021) permits most Texans aged 21 and older to carry a handgun in a holster, openly or concealed, without a License to Carry (LTC), provided they are not otherwise prohibited from possessing a firearm.

6.2 License to Carry (LTC)
The Texas License to Carry (LTC), governed by Texas Government Code Chapter 411, is a voluntary permit that provides reciprocity benefits in other states. Dealers may be asked to serve as a resource for LTC information but are not required to administer LTC programs unless separately certified.

6.3 Private Sales
Texas law does not require background checks for private party sales between non-licensees. However, this FFL business does not facilitate private party sales without conducting a proper NICS check and Form 4473. All transfers conducted by this FFL — regardless of whether they are retail or FFL-to-customer transfers — require full federal compliance.

6.4 NFA Items in Texas
Texas permits the ownership of NFA-regulated items (suppressors, short-barreled rifles, short-barreled shotguns, machine guns manufactured before May 19, 1986, etc.) that are properly registered with the ATF and in compliance with the National Firearms Act (26 U.S.C. § 5801 et seq.). All NFA transfers require:

• ATF Form 4 (transfer of ownership) or Form 1 (manufacture) as applicable
• $200 tax stamp (or $5 for AOW items)
• ATF approval and transfer to be completed before taking possession
• Proper fingerprints, photograph, and CLEO notification (or trust/entity documentation)

 

7. Straw Purchase Prevention
A straw purchase occurs when a person (the straw buyer) purchases a firearm on behalf of another individual who is the actual intended recipient. Straw purchases are a federal felony under 18 U.S.C. § 922(a)(6) — making a false statement on ATF Form 4473.

Red Flags Employees Must Report:

• Buyer states the firearm is for another person
• Third party directs the transaction, selects the firearm, or provides payment
• Buyer appears coached or hesitant on Form 4473 questions
• Buyer states they are purchasing as a “gift” but the recipient is present and selecting the item

Lawful gifts: A firearm purchased as a gift for a third party is permitted, provided the buyer (the gift-giver) is the actual, lawful purchaser who answers all Form 4473 questions as the true purchaser. The gift recipient is NOT required to complete a Form 4473.

 

8. Recordkeeping Requirements
8.1 Acquisition & Disposition (A&D) Logbook
Federal law (27 C.F.R. § 478.125) requires FFLs to maintain a bound book (Acquisition & Disposition Record) documenting every firearm acquired and disposed of by the business. Requirements:

• Entry must be made within 24 hours of acquisition (incoming) and at time of transfer (outgoing)
• Must include: manufacturer, importer, model, serial number, type, caliber, date, and purchaser info
• Logbook must be kept at the licensed premises at all times
• Electronic A&D systems are permitted if they meet ATF specifications
• A&D records must be retained permanently and surrendered to ATF upon business closure

8.2 ATF Form 4473 Retention

Completed transfers	Retain 20 years from date of sale
Denied / Cancelled transfers	Retain 5 years
NFA transfers	Retain permanently (see ATF Form 4 requirements)
Upon FFL closure	Submit all records to ATF Out-of-Business Records Center

8.3 Multiple Sales Reports
Federal law requires FFLs to file a Multiple Sales Report (ATF Form 3310.4) when a single buyer purchases two or more handguns within 5 consecutive business days. The report must be submitted to the ATF and the local law enforcement agency within the same timeframe.

 

9. Inventory Control & Physical Security
9.1 Inventory Audits

• Complete physical inventory must be conducted at least annually
• Any discrepancy between A&D records and physical inventory must be investigated and documented
• Missing or stolen firearms must be reported to the ATF and local law enforcement within 48 hours using ATF Form 3310.11

9.2 Storage Requirements
There is no federal law mandating specific storage standards for FFL dealer inventory during business hours; however, best practices and ATF recommendations include:

• Display firearms must be secured to prevent unauthorized handling by customers (cables, locks, or cases)
• After-hours inventory must be secured in a locked vault, safe, or secured display case
• Security alarm system is strongly recommended and may be required by local ordinance or insurance carrier
• Access to the stockroom/armory area must be restricted to authorized personnel only

 

10. ATF Compliance Inspections
The ATF has the authority under 18 U.S.C. § 923(g) to inspect the licensed premises, records, and inventory of FFLs. Key compliance requirements:

• The ATF may conduct one compliance inspection per year without a warrant (routine inspections)
• Additional inspections may be conducted in connection with a criminal investigation at any time
• All personnel must cooperate fully with ATF inspectors and provide access to all required records
• The FFL holder or a responsible person must be present during inspections when possible
• Any findings or violation notices (ATF Form 5300.13) must be reviewed with legal counsel immediately

 

11. Employee Training & Responsibilities
11.1 Required Training
All employees involved in firearms sales or transfers must complete training on the following before conducting any transaction:

• Proper completion of ATF Form 4473
• NICS background check initiation and result interpretation
• Identification of prohibited persons and straw purchase indicators
• A&D logbook procedures
• Texas state firearms laws relevant to retail sales
• NFA transfer procedures (for employees handling NFA items)

11.2 Ongoing Compliance

• All employees must be re-trained whenever ATF regulations or Texas law change
• Annual refresher training is required for all sales personnel
• Training records must be maintained by management for a minimum of 3 years

11.3 Employee Conduct Prohibitions

• No employee may transfer a firearm without completing a NICS check and Form 4473
• No employee may accept cash transactions that appear designed to circumvent recordkeeping
• No employee may transfer a firearm to a person showing signs of intoxication or threat of harm
• No employee may carry a firearm on the premises while prohibited under state or federal law

 

12. Online Sales & FFL-to-FFL Transfers
This business accepts firearms shipped from other FFLs on behalf of customers who have purchased firearms online. The following procedures apply:

• Only accept transfers from other licensed FFLs (verify license validity via ATF eFFLEZ or EZ Check)
• Do not accept transfer of a firearm until the transferring FFL has provided proper documentation
• Upon receipt, the firearm must be logged into the A&D book as an acquisition immediately
• Customer must complete Form 4473 and pass NICS prior to receiving the firearm
• Transfer fees must be disclosed upfront; no refusal of transfer for non-legal reasons

 

13. Anti-Money Laundering & Cash Transaction Reporting
As a licensed business dealer, federal anti-money laundering (AML) obligations apply under the Bank Secrecy Act (BSA) for certain cash transactions:

• Transactions involving more than $10,000 in cash require filing IRS Form 8300 within 15 days
• Structuring transactions to avoid the $10,000 threshold (“structuring”) is a federal crime
• Employees must be trained to identify and report suspicious cash transaction patterns to management
• Records of Form 8300 filings must be retained for 5 years

This business reserves the right to refuse any transaction where the source of funds or intent appears unlawful or suspicious.

 

14. Key Legal References

Gun Control Act (GCA)	18 U.S.C. §§ 921–931
National Firearms Act (NFA)	26 U.S.C. §§ 5801–5872
ATF Regulations	27 C.F.R. Part 478 (Commerce in Firearms and Ammunition)
ATF Regulations — NFA	27 C.F.R. Part 479
Brady Handgun Violence Prevention Act	Pub. L. 103-159 (NICS requirement)
Texas Penal Code — Unlawful Carry	§ 46.02
Texas Penal Code — Prohibited Sale	§ 46.06
Texas Government Code — LTC	Chapter 411, Subchapter H
Texas Penal Code — Weapons Definitions	§ 46.01
HB 1927 — Texas Permitless Carry (2021)	Effective September 1, 2021

 

15. Policy Acknowledgment
All employees and responsible persons are required to read, understand, and acknowledge this Legal Compliance Policy. Acknowledgment must be documented in writing and retained in the employee file.

Employee Full Name: _________________________	Position / Title: _________________________
Signature: _________________________	Date: _________________________
Owner / Manager Signature: _________________________	Date: _________________________