HQL for Corporations?

md_06unltd · Oct 27, 2016

I am in the process of applying for my Private Detective License in Md.

In reviewing the Annotated Code for Private Detective agencies it speaks to wear and carry, and that the Corporation (Agency) must maintain records of all firearms used by it's members and if they are owned by the corporation or individual (personal).

So how, exactly, does a corporation purchase a firearm? Is there such a thing as a Corporate HQL?

For the purpose of discussion, the "Corporation" will be an LLC.

Thanks

jkeys · Oct 27, 2016

Good question. Businesses and trusts can purchase firearms. Do those entities need a HQL? I can't answer your question, just curious as to what others weigh in with.

A1Uni · Oct 27, 2016

The guns will need to be papered to an officer of the company (read-individual) who must have a HQL.

fabsroman · Oct 29, 2016

Very interesting question. As I understand it, it is really hard for a corporation/trust to go through a background check. So, the firearms would have to be purchased by a person. That is how I did it with my trust. I bought the firearms and then transferred them into my trust. I wonder how this would work for income tax purposes. If the paperwork is done in the individual's name, who owns title to the firearms? The individual cannot transfer them to the LLC because the LLC cannot go through a 4473 or a Form 77R. However, if the LLC does not actually own them, then writing off the expense becomes problematic.

Very interesting question indeed.

whistlersmother · Oct 29, 2016

Hmmm... Do I smell a lawsuit? Al Capone was caught on tax evasion, I wonder if the HQL could go the same route... After all, corporations ARE people - or so we're told...

md_06unltd · Oct 29, 2016

fabsroman said:
Very interesting question. As I understand it, it is really hard for a corporation/trust to go through a background check. So, the firearms would have to be purchased by a person. That is how I did it with my trust. I bought the firearms and then transferred them into my trust. I wonder how this would work for income tax purposes. If the paperwork is done in the individual's name, who owns title to the firearms? The individual cannot transfer them to the LLC because the LLC cannot go through a 4473 or a Form 77R. However, if the LLC does not actually own them, then writing off the expense becomes problematic.

Very interesting question indeed.

And since I am starting a company and wish to arm each of my employees, how do I go about buying more than one handgun every 30 days?

(not looking to pick a fight, just curious how this would be legally handled)

adit · Oct 29, 2016

md_06unltd said:
And since I am starting a company and wish to arm each of my employees, how do I go about buying more than one gun every 30 days?

(not looking to pick a fight, just curious how this would be legally handled)

Apply for a Designated Collectors license (doesn't cost anything to do) under the LLC name. This way you get it on paper, whether they issue it under the LLC name, or kick it back because there's no John Doe requesting it.

Either way you have something on paper for a future lawsuit.

fabsroman · Oct 29, 2016

adit said:
Apply for a Designated Collectors license (doesn't cost anything to do) under the LLC name. This way you get it on paper, whether they issue it under the LLC name, or kick it back because there's no John Doe requesting it.

Either way you have something on paper for a future lawsuit.

I doubt the OP wants to be involved in a lawsuit. Probably just a guy trying to start a business the right way. A business that needs firearms for its employees and how to go about buying firearms under a LLC's name isn't all too clear.

Then, there is the entire HQL issue. Can the OP, or even his business, provide a firearm to an employee?

I think the easiest thing to do would be to create an employment agreement requiring employees to provide their own firearm, but providing the employee with a signing bonus of $500 or whatever is sufficient to buy the firearm, and making that signing bonus contingent upon them working for the LLC for a specified amount of time. That way, the employee has to get the HQl, the employee has to go through the Form 4473, Form 77R, and pass the background checks. The employer gets to write off the $500 bonus as wages.

There is something out there called negligent entrustment. An employer handing over a firearm to an employee, or even a vehicle for that matter, without doing a pretty decent background check could land the employer in a lawsuit if the firearm/vehicle is used improperly/negligently by the employer.

adit · Oct 29, 2016

fabsroman said:
I doubt the OP wants to be involved in a lawsuit. Probably just a guy trying to start a business the right way. A business that needs firearms for its employees and how to go about buying firearms under a LLC's name isn't all too clear.

Then, there is the entire HQL issue. Can the OP, or even his business, provide a firearm to an employee?

I think the easiest thing to do would be to create an employment agreement requiring employees to provide their own firearm, but providing the employee with a signing bonus of $500 or whatever is sufficient to buy the firearm, and making that signing bonus contingent upon them working for the LLC for a specified amount of time. That way, the employee has to get the HQl, the employee has to go through the Form 4473, Form 77R, and pass the background checks. The employer gets to write off the $500 bonus as wages.

There is something out there called negligent entrustment. An employer handing over a firearm to an employee, or even a vehicle for that matter, without doing a pretty decent background check could land the employer in a lawsuit if the firearm/vehicle is used improperly/negligently by the employer.

My comment wasn't for him in particular to sue over it. It was "for the community" just to see what they would say. Maybe it becomes another angle in the MSI suit.

I thought that security guard companies could provide firearms to their EE's. Maybe I'm wrong there.

I would think that the state/attorney could argue that the $500 is the company paying for the firearm if it were contingent on the 4473/77R/HQL.

In the end I agree it's not worth the risk.

I think allowing them to carry is good enough. I don't see anything wrong with paying for the training/HQL/fingerprinting. There are background checks performed so it should be a write off. I'd stay away from buying firearms for them to use, unless they were a security guard co.

HQL for Corporations?

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