Shane James Simpson, the owner and licensed firearms dealer of Simpson Sports, had a charge of allowing an unauthorised person to possess firearms proven but dismissed without conviction in Port Kembla Local Court on Wednesday, after the presiding magistrate Mark Douglass accepted he'd received enough punishment with the loss of thousands of dollars worth of stock seized by police.

Simpson, who pleaded guilty to the offence, admitted he'd allowed his employee, Robert Arthur Coombs, to handle and sell guns at the store without the appropriate licence, referred to as a "firearms authority".

The court heard Coombs, who had been with the business for 12 months, ran the shop on Saturdays and when Simpson was on leave, despite not having the appropriate licence.

He too was charged with an offence - carrying out activities of a firearms dealer without being licensed - and pleaded guilty on Wednesday.

He also walked away without a conviction.

Police documents tendered to the court said Coombs had applied for a "dealer's employee authority" in January last year but been knocked back because he'd not done a safe handling course for handguns.

Simpson was sent a reminder in September last year that Coombs wasn't properly licensed, but he did not act to rectify the situation.

Officers attached to Lake Illawarra command's licensing unit approached Coombs about the licence situation outside the store on April 14 this year, where he told them he believed he had one, adding "Shane got me one, I'm sure".

Checks revealed Coombs wasn't an authority holder, prompting police to close the shop immediately and seize the 330-gun inventory.

Simpson, who had been on holiday, was spoken to by police a few days later before charges were laid against both men.

In court on Wednesday, defence lawyer Simon Munslow described the pair as well-respected members of the community, with no prior criminal records.

Mr Munslow said Simpson's child had been very sick at the time, leading him to overlook the situation.

He said Simpson stood to lose the business, and his livelihood, if he was convicted of the offences, and had already suffered a loss of reputation, embarrassment from media exposure and financial pain due to the seizure of his inventory.

Mr Douglass acknowledged the seriousness of the offence, saying the public expected firearms laws to be followed to the letter.

However, he also said the crimes were at the lowest end of the spectrum, and it was not a situation where guns were ending up in the hands of bikies or criminals.

"I don't think I could do much more [in terms of sentencing] to deter him from committing such an offence in the future," Mr Douglass said.

"I believe [with the extra-curial punishment] he's already been made accountable for his actions."