As a manufacturer, it is fairly common to make a new firearm from an already existing firearm or just a frame/receiver.
For example, you may purchase/acquire an AR-15 lower receiver and decide to assemble it into a rifle for sale (this is manufacturing a rifle). Or, if you are a Class 2 SOT, you may take a current rifle and either cut the barrel to less than 16″ or replace the barrel with a new one that is less than 16″ in length (this is manufacturing an SBR).
In either case, you made a new firearm from an already existing firearm (remember, frames and receivers by themselves are “firearms”).
To do this properly, you MUST complete what we call a “change in form transaction.” Here are the steps:
- Acquire the firearm onto your A&D book from the appropriate source.
- “Make” the new firearm from the old firearm.
- Dispose of the old firearm off of your A&D books to YOUR manufacturer’s FFL.
- Acquire the new firearm onto your A&D books, on a new line, from YOUR manufacturer’s FFL.
What this does it is shows you getting the old firearm, it shows the old firearm being disposed to you and then re-acquired by you in its new form. It will then sit on your books in its new form until it is disposed of (transferred, sold, or destroyed).
By doing this, each firearm (both the old and new) has its own line on your A&D books.
NOTE: if you are building an NFA Firearm as a Class 2 SOT, you MUST submit an ATF Form 2 to the ATF notifying them of the new NFA Firearm within 24 hours.