dismissed L-1A Case: Retail

1 t' 
~c-mn.;fyirt,? data deleted to 
.PT9> -O t ~l&%iiii,v unwa~ianted 
ifl7i3sio;l of pea ma( privacb 
U.S. Department of Homeland Security 
20 Massachusetts Ave. NW, Rrn. 3000 
Washington, DC 20529-2090 
U. S. Citizenship 
and Immigration 
FILE: WAC 08 075 5 1102 Office: CALIFORNIA SERVICE CENTER Date: FEB 1 0 2009 
IN RE: 
PETITION: 
 Petition for a Nonimmigrant Worker Pursuant to Section 101(a)(15)(L) of the Immigration 
and Nationality Act, 8 U.S.C. 5 1 10 l(a)(15)(L) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to 
the office that originally decided your case. Any further inquiry must be made to that office. 
If you believe the law was inappropriately applied or you have additional information that you wish to have 
considered, you may file a motion to reconsider or a motion to reopen. Please refer to 8 C.F.R. $ 103.5 for 
the specific requirements. All motions must be submitted to the office that originally decided your case by 
filing a Form I-290B, Notice of Appeal or Motion, with a fee of $585. Any motion must be filed within 30 
days of the decision that the motion seeks to reconsider or reopen, as required by 8 C.F.R. 5 103.5(a)(l)(i). 
hd P. Grissorn, Acting Chief 
Administrative Appeals Office 
WAC 08 075 5 1 102 
Page 2 
DISCUSSION: The Director, California Service Center, denied the petition for a nonimmigrant visa. The 
matter is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner filed this nonimmigrant petition seeking to employ the beneficiary as an L-1A nonimmigrant 
intracompany transferee pursuant to section 10 l(a)(15)(L) of the Immigration and Nationality Act (the Act), 8 
U.S.C. 5.1 10l(a)(l5)(~). The petitioner, a California corporation, states that it operates two retail candy store 
franchises and a retail ice cream franchise. The petitioner claims to be a subsidiary of, located 
in India. The beneficiary was initially granted one year in L-1A status in order to open a new office in the 
United States and the petitioner now seeks to extend his status for two additional years. 
The director denied the petition concluding that the petitioner failed to establish that the petitioner has a 
qualifying relationship with the foreign entity. Specifically, the director discussed portions of the petitioner's 
franchise agreements and concluded that, because of operational restrictions contained therein, "there can 
never be any actual ownership and control." The director also acknowledged the petitioner's claim that it is 
wholly-owned by the foreign entity, but noted that the stock certificate submitted appeared to be altered and 
its validity was therefore questionable. 
The petitioner subsequently filed an appeal. The director declined to treat the appeal as a motion and 
forwarded the appeal to the AAO for review. On appeal, counsel for the petitioner asserts that the fact that the 
petitioner operates several franchises does not prohibit it from establishing a qualifying relationship with the 
foreign entity. Counsel emphasizes that the franchise agreement does not preclude a franchisee's ability to 
make independent business decisions. Counsel also refers to evidence in the record alleging that the 
petitioner demonstrated that the foreign entity owns 51 percent of the U.S. entity, thus establishing a 
qualifying parent-subsidiary relationship. Counsel submits a brief and additional evidence in support of the 
appeal. 
To establish L-1 eligibility, the petitioner must meet the criteria outlined in section lOl(a)(lS)(L) of the Act. 
Specifically, within three years preceding the beneficiary's application for admission into the United States, a 
qualifying organization must have employed the beneficiary in a qualifying managerial or executive capacity, 
or in a specialized knowledge capacity, for one continuous year. In addition, the beneficiary must seek to 
enter the United States temporarily to continue rendering his or her services to the same employer or a 
subsidiary or affiliate thereof in a managerial, executive, or specialized knowledge capacity. 
The regulation at 8 C.F.R. fj 214.2(1)(3) states that an individual petition filed on Form 1-129 shall be 
accompanied by: 
(i) 
 Evidence that the petitioner and the organization which employed or will employ the 
alien are qualifying organizations as defined in paragraph (l)(l)(ii)(G) of this section. 
(ii) 
 Evidence that the alien will be employed in an executive, managerial, or specialized 
knowledge capacity, including a detailed description of the services to be performed. 
WAC 08 075 51 102 
Page 3 
(iii) 
 Evidence that the alien has at least one continuous year of full time employment 
abroad with a qualifying organization within the three years preceding the filing of 
the petition. 
(iv) 
 Evidence that the alien's prior year of employment abroad was in a position that was 
managerial, executive or involved specialized knowledge and that the alien's prior 
education, training, and employment qualifies himher to perform the intended 
services in the United States; however, the work in the United States need not be the 
same work which the alien performed abroad. 
The regulation at 8 C.F.R. $ 214.2(1)(14)(ii) also provides that a visa petition, which involved the opening of a 
new office, may be extended by filing a new Form I- 129, accompanied by the following: 
(A) 
 Evidence that the United States and foreign entities are still qualifying organizations 
as defined in paragraph (l)(l)(ii)(G) of this section; 
(B) 
 Evidence that the United States entity has been doing business as defined in 
paragraph (l)(l)(ii)(H) of this section for the previous year; 
(C) 
 A statement of the duties performed by the beneficiary for the previous year and the 
duties the beneficiary will perform under the extended petition; 
(D) 
 A statement describing the staffing of the new operation, including the number of 
employees and types of positions held accompanied by evidence of wages paid to 
employees when the beneficiary will be employed in a managerial or executive capacity; 
and 
(E) 
 Evidence of the financial status of the United States operation. 
The sole issue addressed by the director is whether the petitioner has established that the U.S. company and 
the foreign entity have a qualifying relationship. To establish a "qualifying relationship" under the Act and 
the regulations, the petitioner must show that the beneficiary's foreign employer and the proposed U.S. 
employer are the same employer (i.e. one entity with "branch" offices), or related as a "parent and subsidiary" 
or as "affiliates." See generally section 101(a)(15)(L) of the Act; 8 C.F.R. 5 214.2(1). 
The pertinent regulations at 8 C.F.R. 5 2 14.2(1)(l)(ii) define the term "qualifying organization" and related 
terms as follows: 
(G) 
 Quallfiing organization means a United States or foreign firm, corporation, or other 
legal entity which: 
WAC 08 075 5 1102 
Page 4 
(I) Meets exactly one of the qualifying relationships specified in the definitions of 
a parent, branch, affiliate or subsidiary specified in paragraph (l)(l)(ii) of this 
section; 
(2) Is or will be doing business (engaging in international trade is not required) as 
an employer in the United States and in at least one other country directly or 
through a parent, branch, affiliate or subsidiary for the duration of the alien's 
stay in the United States as an intracompany transferee; 
(I) 
 Parent means a firm, corporation, or other legal entity which has subsidiaries. 
(J) 
 Branch means an operating division or office of the same organization housed in a 
different location. 
(K) 
 Subsidiary means a firm, corporation, or other legal entity of which a parent owns, 
directly or indirectly, more than half of the entity and controls the entity; or owns, 
directly or indirectly, half of the entity and controls the entity; or owns, directly or 
indirectly, 50 percent of a 50-50 joint venture and has equal control and veto power 
over the entity; or owns, directly or indirectly, less than half of the entity, but in fact 
controls the entity. 
(L) AfJiliate means 
(I) 
 One of two subsidiaries both of which are owned and controlled by the same 
parent or individual, or 
(2) 
 One of two legal entities owned and controlled by the same group of 
individuals, each individual owning and controlling approximately the same 
share or proportion of each entity. 
The petitioner filed the nonimmigrant petition on January 16, 2008. On the L Classification Supplement to 
Form 1-129, the petitioner stated that the U.S. company "is owned & controlled 100% by the Indian entity, 
Swift Services." 
The petitioner submitted a copy of its Articles of Incorporation dated January 19, 2007, indicating that the 
company is authorized to issue 100 shares of stock. The articles of incorporation were signed by 
v 
who is identified as the incorporator and initial agent for service of process. The petitioner a so 
submitted a photocopy of a share certificate number one indicating the issuance of 100 shares of stock to 
on January 23, 2007. The certificate appears to be signed by r as president and 
secretary. It is noted that the certificate indicates on its face that the company is authorized to issue 20 shares 
of common stock with par value of $100.00 per share. The petitioner also submitted a photocopy of its stock 
. WAC0807551102 
Page 5 
transfer ledger, which shows the issuance of 100 shares to the foreign entity on January 23,2007 in exchange 
for $100.00. 
The petitioner indicated at the time of filing that it is engaged in the operation of two - 
-retail candy franchises, and one I and Treatery retail franchise. 
The petitioner submitted a copy of a franchise agreement dated August 30, 2007 which relates to one of the 
claimed 
 es, located in Chula Vista, California. The franchise 
agreement contains as Exhibit I11 a Statement of Ownership for the petitioning company. According to this 
statement, which is signed by the beneficiary as president andr as vice president, the beneficiary 
owns 50 percent of the petitioning company, and 
Y 
owns the remaining 50%. The other company 
officer, according to the agreement, is 
Upon review, the director found the initial evidence insufficient to establish the claimed qualifying 
relationship between the U.S. and foreign entities. Accordingly, on February 11, 2008, the director issued a 
request for additional evidence, in which she requested, inter alia, a copy of the petitioner's Notice of 
Transaction Pursuant to Corporations Section 25 102(f) showing the total offering amounts for the petitioner's 
stock. The director also requested that the petitioner provide evidence that the parent company has, in fact 
paid for the stock ownership. The director advised that such evidence should include wire transfers, bank 
statements, and canceled checks, and must clearly document that the parent company has paid for the stock 
ownership. The director also requested copies of the petitioner's state and federal income tax returns for 
2007. 
In a response dated April 30, 2008, counsel for the petitioner asserted that the director's request for evidence 
that the foreign entity paid for the U.S. entity was incorrect. Specifically, counsel stated: 
[I]t is not a requirement in Law that shares in a USA entity be paid for by the 
entitylindividual in whose favor those shares are issued. It is only necessary that it be 
evidenced that the shares so issued have been paid for in full. This means that any 
entitylindividual may make payment for the shares issued on behalf of another. 
The petitioner referred to "the Bank Account of the petitioner" and "Exhibit C from the USA entity, being the 
Minutes of the Organizational meeting, page 3, wherein it is clear1 indicated that 5 1% of the issued shares in 
the petitioner has been issued in favor of the foreign entity, ." Counsel indicated that the 
evidence shows that the foreign entity paid $51 .OO in exchange for its 51 shares. However, it is noted that 
neither the petitioner's initial evidence nor its response to the RFE included any bank statements or the 
minutes of the petitioner's organizational meeting. Counsel stated that the Notice of Transaction Pursuant to 
Corporation Code Section 25 102(f), requested by the director, "is not required as shares were not offered or 
issued to the public." 
The petitioner submitted a letter dated April 8, 2008 from , a Certified Public Accountant, who 
stated that 100% of the stocks in the petitioning entity have been fully paid and that "the parent company in 
. . 
India" provided the initial find transfer. 
WAC 08 075 5 1 102 
Page 6 
Finally, the petitioner submitted a copy of its 2007 IRS Form 1120, in which it identified Swift Services as its 
sole owner. 
On May 15, 2008, the director issued a Notice of Intent to Deny the petition, and once again requested that the 
petitioner submit a copy of its Notice of Transaction Pursuant to Corporations Code Section 25102(f), and 
evidence that the parent company has, in fact, paid for its stock ownership. The director also requested copies 
of complete franchise agreements for all franchise businesses operated by the petitioner. 
In a response dated June 2, 2008, counsel for the petitioner once again stated that there is "no necessity, rule 
or regulation who makes the payment for the shares issued." Counsel asserted however, that "in this instance 
all of the issued shares (100) in the petitioner entity were paid in full by the parent entity in India, Swift 
Services in the sum of $100.00." 
The petitioner submitted the following documentation: 
A letter dated May 28, 
 , who stated that his office prepared the 
petitioner's 2007 tax return. 
 issued shares were fully paid from the 
initial funds transferred to the petitioner from India and the amount paid was $100.00 for 100 
shares. further stated that is the sole shareholder and that the 
petitioner is therefore not subject to filing a Notice of Transaction Pursuant to Corporations, 
Section 25 102(f), as this section only applies when a public offering is made or when there are 
more than 35 shareholders. 
A copy of the petitioner's previously submitted stock certificate #1, ostensibly issuing 100 shares 
of stock to the foreign entity on January 23, 2007. The stock certificate is a photocopy, but 
contains some entries written in blue ink. and clearlv visible correction fluid. While the stock 
certificate indicates that "" is the owner of the issued stocks, it can be 
by looking at the reverse side of the certificate that the correction fluid covered the name ' 
It is also clear that the changes were made to a photocopy of the original certificate, 
rather than to the original certificate itself. 
A Bank of America wire transfer advice dated Januarv 19. 2006. The document shows a transfer 
# * 
 - - 
of $29,224.08 from to the an account held by the petitioner. However, the 
petitioning company was not formed until January 2007. 
- - - 
A copy of the franchise agreement between the petitioner and 
executed in August 2007. 
 I 
A "Transfer Agreement, Release and Consent" between 1- 
as transferor, and the petitioner, as I 
of the agreement, the transfer was to take place on May 12,2008. 
The director denied the petition on June 23, 2008, concluding that the petitioner failed to establish that the 
U.S. company has a qualifying relationship with the foreign entity. 
Preliminarily, the director noted that the stock certificate submitted in response to the notice of intent to deny 
appeared to be altered and therefore its validity was in question. However, the primary grounds for denial of 
WAC0807551102 
Page 7 
the petition were related to the petitioner's operation of franchise businesses. In this regard, the director 
stated: 
Because of the structure provided in a franchise agreement wherein the foreign entity is 
allowed to use the name of the franchising organization but must comply with certain 
operational restrictions, there can never be any actual ownership and control of the 
petitioning organization. 
to operate the franchisor's stores. The petitioner must agree to use the franchisor's name, 
products, services, promotions, selling, distribution and display methods, and a variety of 
other company support. . . . Essentially, the franchisor owns and controls the store while the 
petitioner (the franchisee) only has purchased the license to operate it. 
The director concluded that the petitioner failed to establish that the U.S. company is an affiliate or subsidiary 
of the beneficiary's foreign employer. 
On appeal, counsel for the petitioner asserts that to establish the parent-subsidiary relationship between the 
foreign entity and the petitioner, it must show that the foreign entity owns 51 percent of the U.S. entity. 
Counsel contends that the petitioner has "fully documented" that owns and controls 5 1 percent 
of the petitioning company, and argues that the fact that the petitioner operates franchise businesses does not 
have any effect on this "de jure" control gained through majority ownership. Counsel emphasizes that the 
franchises are independently controlled and operated and there is nothing unduly restrictive in either franchise 
agreement. Finally, counsel refers to the previously submitted stock certificate and share register as "legal 
documents that clearly evidence the ownership of the petitioner's business." 
Upon review, the director incorrectly focused on the petitioner's operation of a franchise rather than on the 
necessary qualifying relationship between the beneficiary's foreign employer and the U.S. petitioner. See 8 
C.F.R. 9 214.2(1)(3)(i) (requiring that the petitioner and the organization which employed the beneficiary are 
qualifying organizations). Evidence of the petitioner's stock ownership is critical to determining whether a 
qualifying relationship exists. 
In this case, the director placed undue emphasis on the effect of the petitioner's franchise agreement on 
control of the United States entity. However, the decision and the previously issued request for additional 
evidence and notice of intent to deny demonstrate that the director also considered the claimed parent- 
subsidiary relationship between the foreign entity and the petitioner's claims regarding its ownership and 
control. The AAO maintains plenary power to review each appeal on a de novo basis. 5 U.S.C. 557(b) ("On 
appeal from or review of the initial decision, the agency has all the powers which it would have in making the 
initial decision except as it may limit the issues on notice or by rule."); see also, Janka v. US. Dept. of 
Transp., NTSB, 925 F.2d 1147, 1149 (9th Cir. 1991). The AAO's de novo authority has been long recognized 
by the federal courts. See, e.g. Dor v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989). Accordingly, the 
petitioner's evidence and eligibility will be discussed herein. 
WAC 08 075 5 1 102 
Page 8 
The regulations and case law confirm that the key factors for establishing a qualifying relationship between 
the U.S. and foreign entities are "ownership" and "control." Matter of Siemens Medical Systems, Inc. 19 I&N 
Dec. 362 (BIA 1986); Matter of Hughes, 18 I&N Dec. 289 (Comm. 1982); see also Matter of Church 
Scientology International, 19 I&N Dec. 593 (BIA 1988) (in immigrant visa proceedings). In the context of 
this visa petition, ownership refers to the direct and indirect legal right of possession of the assets of an entity 
with full power and authority to control; control means the direct or indirect legal right and authority to direct 
the establishment, management, and operations of an entity. Matter of Church Scientology International, 19 
I&N Dec. at 595. 
As general evidence of a petitioner's claimed qualifying relationship, stock certificates alone are not sufficient 
evidence to determine whether a stockholder maintains ownership and control of a corporate entity. The 
corporate stock certificate ledger, stock certificate registry, corporate bylaws, and the minutes of relevant 
annual shareholder meetings must also be examined to determine the total number of shares issued, the exact 
number issued to the shareholder, and the subsequent percentage ownership and its effect on corporate 
control. Additionally, a petitioning company must disclose all agreements relating to the voting of shares, the 
distribution of profit, the management and direction of the subsidiary, and any other factor affecting actual 
control of the entity. See Matter of Siemens Medical Systems, Inc., 19 I&N Dec. at 364-365. Without full 
disclosure of all relevant documents, CIS is unable to determine the elements of ownership and control. 
In general, a "franchise" is a cooperative business operation based on a contractual agreement in which the 
franchisee undertakes to conduct a business or to sell a product or service in accordance with methods and 
procedures prescribed by the franchiser, and, in return, the franchiser undertakes to assist the franchisee 
through advertising, promotion, and other advisory services. A franchise agreement, like a license, typically 
requires that the franchisee comply with the franchiser's restrictions, without actual ownership and control of 
the franchised operation. See Matter of Schick, 13 I&N Dec. 647 (Reg. Comm. 1970) (finding that no 
qualifying relationship exists where the association between two companies was based on a license and 
royalty agreement that was subject to termination since the relationship was "purely contractual"). An 
association between a foreign and U.S. entity based on a contractual franchise agreement is usually 
insufficient to establish a qualifying relationship. Id. 
By itself, the fact that a petition involves a franchise will not automatically disqualify the petitioner under 
section 101(a)(15)(L) of the Act. When reviewing a petition that involves a franchise, the director must 
carefully examine the record to determine how the franchise agreement affects the claimed qualifying 
relationship. As discussed, if a foreign company enters into a franchise, license, or contractual relationship 
with a U.S. company, that contractual relationship can be terminated and will not establish a qualifying 
relationship between the two entities. See Matter of Schick, 13 I&N Dec. at 649. However, if a foreign 
company claims to be related to a U.S. company through common ownership and control, and that U.S. 
company is doing business as a franchisee, the director must examine whether the U.S. and foreign entities 
possess a qualifying relationship through common ownership and management under section 101 (a)(15)(L) of 
the Act. 
Nonetheless, it is critical in all cases that the petitioner fully disclose the terms of any franchise agreement, 
especially as the agreement relates to the transfer of ownership, voting of shares, distribution of profit, 
. 
 WAC 08 075 5 1 102 
Page 9 
management and direction of the franchisee, or any other factor affecting actual control of the entity. CJ 
Matter of Siemens Medical Systems, Inc., 19 I&N Dec. at 364-65. In the present matter, the petitioner has 
submitted copies of its agreements with both franchisors. The director found the terms of the agreements to 
be so restrictive that she determined the foreign entity could not exercise control over the United States 
petitioner. Upon review of the documentation provided, the AAO concurs with counsel that there is nothing in 
the provisions of the agreement that would negate an otherwise valid claimed parent-subsidiary relationship 
between the foreign and U.S. companies. The provisions cited in the director's decision are neither unusual 
for this type of agreement nor unduly restrictive. 
As noted above, by itself, the fact that a petition involves a franchise will not automatically disqualify the 
petitioner under section 101(a)(15)(L) of the Act. Case law provides that control may be "de jure" by reason 
of ownership of 51 percent of outstanding stocks of the other entity or it may be "de facto" by reason of 
control of voting shares through partial ownership and possession of proxy votes. Matter of Hughes, 18 I&N 
Dec. 289 (Comm. 1982). In this case, the petitioner and counsel claim that the foreign entity owns either 51 
percent or 100 percent of the petitioner's outstanding stock and submits evidence in support of this claim. If 
the claimed relationship exists, the foreign entity in this case would therefore be assumed to have "de jure" 
control over the petitioner and the petitioner's burden would be met with respect to establishing ownership 
and control. 
Therefore. in the uresent matter. the critical relationshiu is that between the beneficiarv's overseas emulover. 
.a, 
I' 
, the claimed relationship between m 
6, and the U.S. petitioner, I. Although the petitioner will do business in 
the United States through franchise agreements with 
 . and 
and the petitioner is based on 
stock ownership and not a franchise agreement. In order to determine whether a qualifying relationship 
exists, the AAO must examine the number of shares of stock issued by the petitioner, the ownership of that 
stock, and the resulting percentage ownership of the U.S. petitioner. 
Upon review on the record in its entirety there is insufficient evidence for the AAO to conclude that the 
foreign entity and U.S. entity had a qualifying relationship at the time the petition was filed. 
First, the petitioner has not consistently identified the foreign entity's ownership interest in the U.S. company. 
The petitioner initially indicated on Form 1-129 that the foreign entity is the owner of 100 percent of the 
petitioner's stock. In response to the WE, counsel for the petitioner referred to the minutes of the petitioner's 
organizational meeting, and indicated that the minutes establish that the foreign entity owns 5 1 percent of the 
United States entity. In response to the Notice of Intent to Deny, counsel stated that the foreign entity owns 
100 percent of the U.S. entity, and apologized for erroneously stating in response to the RFE that the 
ownership interest is only 51 percent. On appeal, counsel once again asserts that the foreign entity owns 5 1 
percent of the U.S. entity. It is incumbent upon the petitioner to resolve any inconsistencies in the record by 
independent objective evidence. Any attempt to explain or reconcile such inconsistencies will not suffice 
unless the petitioner submits competent objective evidence pointing to where the truth lies. Matter of Ho, 19 
I&N Dec. 582, 591-92 (BIA 1988). As noted above, the record does not contain the minutes of the 
petitioner's organizational meeting. 
* 
 WAC 08 075 5 1 102 
Page 10 
Although the petitioner's stock certificate suggests that the foreign entity owns 100 shares of the petitioner's 
stock, the petitioner's stock certificate also appears to have been altered using correction fluid, and the name 
of the foreign entity was written over the name "." Mr. also signed the stock certificate 
as president and secretary, while other documents in the record suggest that the beneficiary is the company 
president. Doubt cast on any aspect of the petitioner's proof may, of course, lead to a reevaluation of the 
reliability and sufficiency of the remaining evidence offered in support of the visa petition. Matter of Ho, 19 
I&N Dec. 582, 591 (BIA 1988). Furthermore, the petitioner's articles of incorporation indicate that the 
company is authorized to issue 100 shares, while the stock certificate indicates on its face that the company 
may issue 20 shares with a par value of $100.00 per share. 
Furthermore, the petitioner's franchise agreement with 
 . includes a 
statement of ownership indicating that the beneficiary and 
 each own 50 percent of the U.S. 
company. Again, it is incumbent upon the petitioner to resolve any inconsistencies in the record by 
independent objective evidence. Any attempt to explain or reconcile such inconsistencies will not suffice 
unless the petitioner submits competent objective evidence pointing to where the truth lies. Id. at 591-92. 
Although the director specifically noted the alteration to the petitioner's stock certificate, the petitioner has 
provided no explanation for the alteration on appeal. Given the ease with which a stock certificate can be 
manipulated, additional documentary evidence is required in order to establish that the foreign entity is 
actually the owner of these shares. As ownership is a critical element of this visa classification, the director 
may reasonably inquire beyond the issuance of paper stock certificates into the means by which stock 
ownership was acquired. As requested by the director, evidence of this nature should include documentation 
of monies, property, or other consideration furnished to the entity in exchange for stock ownership. 
Additional supporting evidence would include stock purchase agreements, subscription agreements, corporate 
by-laws, minutes of relevant shareholder meetings, or other legal documents governing the acquisition of the 
ownership interest. 
The petitioner has not adequately documented that the foreign entity paid for its claimed interest in the U.S. 
company. The only financial transaction documented in the record appears to show a transfer of over $29,000 
from the foreign entity to the U.S. company in January 2006, one year before the petitioner was even 
incorporated. The date of the transfer raises serious questions regarding the credibility of this evidence. 
A few errors or minor discrepancies are not reason to question the credibility of an alien or an employer 
seeking immigration benefits. See, e.g., Spencer Enterprises Inc. v. US., 345 F.3d 683, 694 (9th Cir., 2003). 
However, anytime a petition includes numerous errors and discrepancies, and the petitioner fails to resolve 
those errors and discrepancies after U. S. Citizenship and Immigration Services (USCIS) provides an 
opportunity to do so, those inconsistencies will raise serious concerns about the veracity of the petitioner's 
assertions. Doubt cast on any aspect of the petitioner's proof may undermine the reliability and sufficiency of 
the remaining evidence offered in support of the visa petition. Matter of Ho, 19 I&N Dec. at 591. In this 
case, the discrepancies and errors catalogued above lead the AAO to conclude that the evidence of the 
petitioner's relationship with the foreign entity is not credible. 
WAC 08 075 51102 
Page 11 
Finally, in order to establish a relationship with the foreign entity, the petitioner must establish that the 
foreign entity is a qualifying organization that continues to do business abroad. See 8 C.F.R. $ 
214.2(1)(l)(ii)(G). It is further noted that the petitioner has not submitted any evidence to establish that the 
foreign sole proprietorship continues to do business, as required at 8 C.F.R. 5 214.2(1)(1)(ii)(G)(2). Unlike a 
corporation, a sole proprietorship does not exist as an entity apart from the individual owner. Matter of 
United Investment Group, 19 I&N Dec. 248 (Comm. 1984). A sole proprietorship is a business in which one 
person owns all of the assets and operates the business in his or her personal capacity. Black's Law Dictionary 
1398 (7th Edition). As the petitioner claims that the beneficiary is the owner and sole proprietor of the 
foreign business, the presence of the beneficiary in the United States raises the question of whether the 
foreign business continues to do business abroad. While the petitioner submitted evidence intended to 
establish that the foreign entity continues to do business, the most recent evidence was dated January 2007, 
approximately one year prior to the date the petition was filed, and preceded the approval of the beneficiary's 
initial L- 1 A visa petition. 
Based on the foregoing discussion, the petitioner has not established that the petitioner and the foreign entity 
have a qualifying relationship. Accordingly, the appeal will be dismissed. 
Beyond the decision of the director, the record does not contain sufficient evidence that the petitioner has 
been engaged in the regular, systematic, and continuous provision of goods and/or services in the United 
States for the entire year prior to filing the petition to extend the beneficiary's status. See 8 C.F.R. 5 
2 14.2(1)(14)(ii)(B). The beneficiary previously approved for L-IA status for a one-year period commencing 
on February 15, 2007. While the petitioner claims to be operating three different retail stores, the record is 
devoid of evidence that the petitioner hired any employees prior to December 2007, and it is unclear how the 
company could have operated the claimed businesses prior to hiring employees. The petitioner emphasized 
that it acquired a franchise from another company that had operated the same business in the 
same location since 2004, and appears to rely on these facts in support of its claim that it has been doing 
business for the previous year. However, the petitioner must show that it was doing business in its own right 
since the beneficiary's L-1A status was granted. Furthermore, according to evidence submitted in response to 
the NOID and on appeal, the petitioner did not formally acquire the franchise rights to operate the = 
store until May 2008, four months after the petition was filed. Regardless, the petitioner has not 
submitted evidence that it was doing business for the majority of 2007. For this additional reason, the petition 
may not be approved. 
Another issue not addressed by the director is whether the petitioner established that the beneficiary will be 
employed in a primarily managerial or executive capacity under the extended petition. The petitioner's claim 
that the beneficiary will be employed in a primarily managerial or executive capacity is largely predicated on 
its claim that it is operating several businesses, each with its own manager and supervisors, and its claim that 
the beneficiary's only direct subordinate is a general manager who oversees all three businesses. Specifically, 
the petitioner claims to operate two candy store franchises and one ice cream franchise, and indicated on 
Form 1-129 that it employs 22 workers. However, the evidence of record shows that in the payroll period 
ended on February 15, 2008, which marks the end of the beneficiary's initial one-year period in L-1A 
classification, the petitioner paid wages of $818.40 to a total of only six workers. Of these six workers, three 
worked only four hours during the two-work period, one worked eight hours, one worked 18 hours, and one 
WAC0807551102 
Page 12 
worked 64 hours. The petitioner has not explained how it was able to operate three retail businesses with six 
part-time employees. Given that the employees worked a total of only 102.3 hours, it is unclear how they 
relieved the beneficiary from participating in the day-to-day operation on the petitioner's businesses. In the 
second half of February 2008, the petitioner paid one employee for five hours of work. Overall, in the first 
quarter of 2008, the petitioner paid $2,750.48 to a total of nine employees, with employees earning wages 
between $32.00 and $840.00 for the quarter. 
Pursuant to section 101(a)(44)(C) of the Act, 8 U.S.C. $ 1101(a)(44)(C), if staffing levels are used as a factor 
in determining whether an individual is acting in a managerial or executive capacity, USCIS must take into 
account the reasonable needs of the organization, in light of the overall purpose and stage of development of 
the organization. In the present matter, however, the regulations provide strict evidentiary requirements for 
the extension of a "new office" petition and require USCIS to examine the organizational structure and 
staffing levels of the petitioner. 
 See 8 C.F.R. 8 214.2(1)(14)(ii)(D). 
 The regulation at 8 C.F.R. 5 
214.2(1)(3)(v)(C) allows the "new office" operation one year within the date of approval of the petition to 
support an executive or managerial position. There is no provision in CIS regulations that allows for an 
extension of this one-year period. If the business does not have sufficient staffing after one year to relieve the 
beneficiary from primarily performing operational and administrative tasks, the petitioner is ineligible by 
regulation for an extension. In the instant matter, the petitioner has not reached the point that it can employ 
the beneficiary in a predominantly managerial or executive position. The petitioner's claim that it employs a 
staff of 22 people, including subordinate managers and professionals is not corroborated by the evidence of 
record. 
Furthermore. the record does not contain evidence that the petitioner ever completed the purchase or signed a 
petitioner included employees of this store in its initial organizational chart. These employees did not appear 
on the petitioner's subsequent organizational chart dated April 15, 2008, and no explanation was provided. It 
must be concluded based on the evidence of record that the petitioner never operated this store or employed 
the claimed employees. Similarly, although the petitioner claimed to be operating the ranchise 
at the time the petition was filed, evidence submitted in response to the notice of intent to deny and on appeal 
indicates that the previous operator of the business actually transferred and assigned the franchise agreement 
to the petitioner on May 12, 2008, three months after the beneficiary's L-1 status expired, and four months 
after the petition was filed. The petitioner must establish eligibility at the time of filing the nonimmigrant 
visa petition. A visa petition may not be approved at a future date after the petitioner or beneficiary becomes 
eligible under a new set of facts. Matter ofMichelin Tire Corp., 17 I&N Dec. 248 (Reg. Comm. 1978). 
Moreover, of the employees listed on the organizational chart for the franchise as of April 15, 
2008, the evidence of record shows that the claimed manager and assistant manager of the store were in fact 
terminated on December 23, 2007, while another listed employee was terminated on March 3, 2008. The 
record is also devoid of evidence that the petitioner employed the general manager who is claimed to be the 
beneficiary's. direct subordinate. Simply going on record without supporting documentary evidence is not 
sufficient for the purpose of meeting the burden of proof in these proceedings. Matter of SofJici, 22 I&N Dec. 
158,165 (Comm. 1998). 
- 
 WAC 08 075 5 1 102 
Page 13 
Overall, the significant discrepancies between the petitioner's claims regarding the size and scope of its 
business and the documentary evidence submitted to support these claims raises serious questions regarding 
the credibility of the petitioner's statements in general, and leads the AAO to doubt the accuracy of the 
position descriptions provided for the beneficiary's position. It is incumbent upon the petitioner to resolve any 
inconsistencies in the record by independent objective evidence. Any attempt to explain or reconcile such 
inconsistencies will not suffice unless the petitioner submits competent objective evidence pointing to where 
the truth lies. Matter of Ho, 19 I&N Dec. at 591 -92. Doubt cast on any aspect of the petitioner's proof may, 
of course, lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in support 
of the visa petition. Id. at 591. Based on the foregoing, the petitioner has not established that the beneficiary 
will be employed in a primarily managerial or executive capacity under the extended petition. For this 
additional reason, the petition cannot be approved. 
An application or petition that fails to comply with the technical requirements of the law may be denied by the 
AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See 
Spencer Enterprises, Inc. v. United States, 229 F. Supp. 2d 1025, 1043 (E.D. Cal. 2001), affd. 345 F.3d 683 
(9th Cir. 2003); see also Dor v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews 
appeals on a de novo basis). 
The petition will be denied and the appeal dismissed for the above stated reasons, with each considered as an 
independent and alternative basis for the decision. When the AAO denies a petition on multiple alternative 
grounds, a plaintiff can succeed on a challenge only if he or she shows that the AAO abused its discretion 
with respect to all of the AAO's enumerated grounds. See Spencer Enterprises, Inc. v. United States, 229 F. 
Supp. 2d at 1043. 
In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the 
petitioner. Section 291 of the Act, 8 U.S.C. fj 1361. Here, that burden has not been met. 
ORDER: The appeal is dismissed.