dismissed L-1A Case: Retail

U.S. Department of Homeland Security 
20 Massachusetts Ave. N.W.., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
File: WAC 03 016 51061 Office: CALIFORNIA SERVICE CENTER Date: .&$I; j, 200.5 
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. $ 1101(a)(15)(L) 
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 ofice. 
,'I+ Robert P. Wiema 
1 
Administrative Appeals Office 
h 
WAC 03 016 51061 
Page 2 
DISCUSSION: The Director, California Service Center, denied the petition for a nonimrnigrant visa. The 
matter is now before the Administrative Appeals Office (AAO) on appeal. The AAO will dismiss the appeal. 
The petitioner filed this nonimrnigrant petition seeking to extend the employment of its president as an L-1A 
nonimrnigrant intracompany transferee pursuant to section 101(a)(15)(L) of the Immigration and Nationality 
Act (the Act), 8 u.s.c.-$ 1101(a)(15)(i). The petitioner is a corporation organized in the State of California 
es a General Nutrition Center store. The petitioner claims that it is the subsidiary o 
I located in Murnbai, India. The beneficiary was initially granted a one-year period of stay o open a 
in the United States in 1997 and was subsequently granted two extensions of status. The petitioner 
now seeks to extend the beneficiary's stay for an additional two-year period. 
The director denied the petition concluding that (I) the petitioner did not establish a qualifying relationship 
between the United States entity and the foreign entity, and (2) the petitioner did not establish that the 
beneficiary has been or will be employed in a primarily managerial or executive capacity. The director denied 
the petition in part because the petitioner is operating a franchise, noting, "the petitioner may purchase a 
franchise but can never own and control it." 
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 director 
erred by concluding that the petitioner's franchise agreement with General Nutrition Center precludes a 
finding that the U.S. and foreign entities have a qualifying relationship. Counsel further asserts that the 
director placed undue emphasis on the number of subordinate employees managed by the beneficiary, and 
contends that the petitioner provided sufficient evidence to establish that he would be employed in a 
qualifying managerial or executive capacity. Counsel submits a brief and additional evidence in support of the 
appeal. 
To establish eligibility for the L-1 nonimmigrant visa classification, the petitioner must meet the criteria 
outlined in section 101(a)(15)(L) of the Act. Specifically, 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 within three years preceding the beneficiary's application for admission into the United 
States. 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. 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 03 016 51061 
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 first issue in the present proceeding is whether the beneficiary's foreign employer and the U.S. entity are 
qualifying organizations as required in the regulation at 8 C.F.R. 3 214,2(1)(3)(i). 
The pertinent regulations at 8 C.F.R. $ 214.2(1)(l)(ii) define the term "qualifying organization" and related 
terms as follows: 
(G) QuaEihing organization means a United States or foreign firm, corporation, or other 
legal entity which: 
(1) Meets exactly one of the qualifying relationships specified in the 
definitions of a parent, branch, affiliate or subsidiary specified in 
paragraph (I)(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; and, 
(3) Otherwise meets the requirements of section lOl(a)(lS)(L) of the Act. 
(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 fm, corporation, or other legal entity of which a parent owns, 
directly or indirectly, more than half of the entity and controIs 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 
WAC 03 016 5 1061 
Page 4 
over the entity; or owns, directly or indirectly, less than half of the entity, but in fact 
controls the entity. 
(L) Afilinte 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 controIled by the same group of 
individuals, each individual owning and controlling approximately the 
same share or proportion of each entity. 
On the L Classification Supplement to Form 1-129, the petitioner stated that the United States entity is 100 
percent owned by the beneficiary's previous foreign employer, an Indian partnership. The petitioner claimed 
that the foreign entity is owned in equal parts by the beneficiary and two other individuals. The petitioner did 
not submit any supporting documentation to establish the claimed parent-subsidiary relationship with the 
initial petition, which was submitted on October 21, 2002. 
On December 3, 2002, the director issued a request for additional evidence asking that the petitioner submit, 
in part: (1) the foreign company's articles of incorporation; (2) the U.S. company's articles of incorporation; 
and (3) copies of the U.S. company's state and federal income tax returns with all required schedules and 
statements from the date the U.S. company was established to the present. The director also requested various 
documents to establish that both the foreign company and U.S. company are doing business. 
In a response dated February 24, 2003, the petitioner provided the requested evidence and additional 
documents in an attempt to establish a qualifying relationship between the United States and foreign entities. 
The petitioner submitted the Deed of Partnership and subsequent supplement for the foreign 
individuals - the beneficiary 
he petitioner also submitted the foreign entit 's 
which indicate that two partners 
currently own the foreign company in equal parts. -Y 
As evidence of the U.S. company's ownership, the petitioner provided a copy of a stock certificate number 
one identifying the foreign entity as the owner of 400 shares of the petitioner's common stock. The stock 
certificate indicates on its face that the United States company is authorized to issue 10,000 shares of common 
stock. The petitioner also submitted its articles of incorporation and a copy of an "action of directors by 
written consent" in which the directors of the company agreed to issue 400 shares of stock to the foreign 
entity for consideration of $40,000. The petitioner also submitted a State of California "Notice of Transaction 
Pursuant to Corporations Code Section 25102(f)" stating that the U.S. company issued common stock for 
consideration of $40,000 on September 19, 1997. In addition, the petitioner submitted its Forms 1120, U.S. 
Corporation Income Tax Return, for the years 1997 through 2001. The director did not request, nor did the 
petitioner submit. a copy of the franchise agreement with I-:. 
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In a decision dated June 20,2003, the director concluded that the petitioner had failed to establish a qualifying 
relationship between the beneficiary's foreign employer and the U.S. entity. The director noted that the 
requisite factors for a qualifying relationship are ownership and control, and stated that in a franchise 
relationship neither the beneficiary's foreign employer nor the U.S. corporation can own and control the 
business. The director stated that the franchiser essentially owns and controls the store while the franchisee 
has only purchased a license. to operate it. The director consequently denied the petition. 
On appeal, counsel for the petitioner states "it was erroneous to deny the petition on the basis that GNC and 
[the foreign entity] share only a franchise business relationship. . . . The correct focus is on the business 
relationship between [the foreign entity] and [the petitioner.] The foreign entity has the requisite ownership 
and control of [the petitioner] to establish a qualifying relationship. ..." Counsel further states "from the 
franchise agreement, it is clear that [the petitioner] (and indirectly [the foreign entity]) still retain control over 
the GNC business . . .. The franchiser exercises contractual control only to the extent of protecting the 
strength and quality of its trademark and other proprietary marks." Finally, counsel cites an unpublished AAO 
decision in which the AAO considered the specific terms of the petitioner's franchise agreement in order to 
determine its actual effect on ownership and control. Counsel submits a copy of the ranchise agreement 
and states "it is the specific terms in them franchise agreement, and not a general denial, that should be 
the focus in deciding on whether a qualifying relationship exists." 
On 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. $ 214,2(1)(3)(i) (requiring that the petitioner and the organization which employed the beneficiary are 
qualifying organizations). Contrary to the director's statements that "the evidence of stock ownership is 
immaterial," the evidence of stock ownership is not only material to the petitioner's claims, but critical to 
determining whether a qualifying relationship exists. 
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 proceedinks). 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 CIzurch Scienrolog~ 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 
WAC 03 016 51061 
Page 6 
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. 
ln 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. Cornrn. 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. See also, 9 FAM 41.54 N7.1-5; 0.1. 214.2(1)(4)(iii)(D) 
(noting that associations between companies based on factors such as ownership of a small amount of stock in 
another company, or licensing or franchising agreements, do not create affiliate relationships between the 
entities for L-1 purposes). 
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, 
management and direction of the franchisee, or any other factor affecting actual control of the entity. CF 
Matter of Siemens Medical Systems, Inc., 19 I&N Dec. at 364-65. 
In the resent matter, the critical relation 
D 
nd the U.S. 
oes usiness In t e United ., the claimed 
relationship between Chemists in India and 
and not the 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, the petitioner has failed to demonstrate the existence of the requisite qualifying relationship 
between the foreign and U.S. entities. There are several contradictions and omissions from the record that 
WAC 03 016 51061 
Page 7 
undermine the petitioner's claim that the foreign entity is currently the sole owner of the United States entity. 
As of the date of filing, it appears that there is no common ownership between the two companies. 
As evidence of the foreign entity's ownership interest, the petitioner submitted a copy of its stock certificate 
number one, representing the issuance of 400 shares of common stock in., to 
Chemists on September 19, 1997. Secondary documents, including the petitioner's articles of 
incorporation, confirm that the foreign entity was to provide consideration of $40,000 in exchange for the 
stock. The petitioner did not submit copies of its stock certificate ledger, stock certificate registry, or any 
evidence that would confirm the receipt by the petitioner of $40,000 from the foreign entity. Furthermore, the 
articles of incorporation and stock certificate indicate that the petitioner is authorized to issue a total of 10,000 
shares of common stock. Accordingly, because of the petitioner's failure to submit all of the relevant 
corporate documents, the AAO cannot determine how many shares of stock have been issued in total, how 
many shares are currently owned by the overseas entity, and whether there are currently any other owners. 
The petitioner's failure to provide a copy of its stock certificate ledger and stock certificate registry is 
especially damaging to its claim in light of conflicting evidence regarding the current ownership of the 
petitioner's stock. As noted above, the petitioner has submitted its federal income tax retums for the years 
1997 through 2001. All six income tax returns, on Schedule K, identify the beneficiary, not the foreign entity, 
as the sole owner of 100 percent of the petitioner's stock. In addition, the petitioner's income tax returns, on 
Schedule L, indicate the value of its issued common stock as $10,000, which conflicts with other evidence 
that the foreign entity purchased the petitioner's stock for $40,000 in 1997. These additional discrepancies 
undermine the petitioner's claimed relationship with the beneficiary's foreign employer. 
Furthermore, although the petitioner claims that the foreign entity continues to be owned in equal parts by the 
beneficiary and two other partners, the financial statements and audit reports for the foreign entity for the 
years 2001 and 2002 indicate that the beneficiary is no longer a partner in the foreign entity. If, as indicated 
on the petitioner's tax returns, the beneficiary is currently the sole owner of the U.S. company, and if he no 
longer has any ownership interest in the foreign entity, it must be concluded that the two companies currently 
share absolutely no common ownership or control. 
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). 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. 
Absent full disclosure of all relevant documents, the AAO is unable to conclude that the foreign and U.S. 
entities are qualifying organizations, and specifically that the beneficiary's foreign employer has ownership 
and control of the petitioning organization. For this reason, the petition may not be approved. 
As the petitioner has failed to establish a qualifying relationship with the foreign entity, the fact that the 
petitioner operates as a - franchise is immaterial and will not be discussed in this 
decision. However, the AAO concurs with counsel that the terms of the franchise agreement, and not the mere 
WAC 03 016 51061 
Page 8 
existence of the franchise agreement, should be considered when the petitioner has otherwise established a 
qualifying relationship with a foreign entity. Furthermore, the AAO notes for the record, that based on the 
evidence provided, the franchise agreement in this case is between . as franchiser and 
the beneficiary and his spouse as franchisee. The AAO cannot conclude, absent evidence that the agreement 
was subsequently transferred or assigned to the petitioner, that the petitioner is doing business as a GNC 
store. 
The second issue this matter is whether the beneficiary will be employed by the United States entity in a 
primarily managerial or executive capacity. 
Section 101(a)(44)(A) of the Act, 8 U.S.C. 1101(a)(44)(A), defines the term "managerial capacity" as an 
assignment within an organization in which the employee primarily: 
(i) manages the organization, or a department, subdivision, function, or component of 
the organization; 
(ii) supervises and controls the work of other supervisory, professional, or managerial 
employees, or manages an essential function within the organization, or a department 
or subdivision of the organization; 
(iii) if another employee or other employees are directly supervised, has the authority to 
hire and fire or recommend those as well as other personnel actions (such as 
promotion and leave authorization), or if no other employee is directly supervised, 
functions at a senior level within the organizational hierarchy or with respect to the 
function managed; and 
(iv) exercises discretion over the day to day operations of the activity or function for 
which the employee has authority. A first line supervisor is not considered to be 
acting in a managerial capacity merely by virtue of the supervisor's supervisory 
duties unless the employees supervised are professional. 
Section 101(a)(44)(B) of the Act, 8 U.S.C. 8 1101(a)(44)(B), defines the term "executive capacity" as an 
assignment within an organization in which the employee primarily: 
(i) directs the management of the organization or a major component or function of the 
organization; 
(ii) establishes the goals and policies of the organization, component, or function; 
(iii) exercises wide latitude in discretionary decision making; and 
(iv) receives only general supervision or direction from higher level executives, the board 
of directors, or stockholders of the organization. 
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In an October 18, 2002 letter appended to the initial petition, the petitioner described the beneficiary's duties 
as follows: 
As the highest executive officer of [the petitioner], [the beneficiary] will continue to be 
responsible for directing the management of the company and establishing the goals and 
policies. He analyzes the company's progress towards its business goals. [The beneficiary] 
plans, implements and carries-out the business plan of the company. [The beneficiary] directs 
the expansion of the company's business. He establishes the business plan and determines the 
policies and standards of [the petitioner.] He organizes and establishes the sales policies of 
the company as well as directs new business operations. [The beneficiary] is responsible for 
directing the marketing activities of the company. He also makes all personnel decisions and 
has the authority to hire and fire all managerial, supervisory and other employees for the 
store and any business which are acquired by the company. 
As President of [the petitioner], [the beneficiary] manages the day-to-day business activities 
of the corporation and store and future business acquisitions and implements 
modifications when required. He is responsible for negotiating the purchase of new 
businesses on behalf of the company. [The beneficiary] also reviews the finances of the 
company and analyzes the expenses and profitability of the company. 
The petitioner indicated on Form 3-129 that it had one employee at the time the petition was filed. The 
petitioner also submitted its Forms 1120, U.S. Corporation Income Tax Return, for 1999 and 2000, showing 
that the company paid salaries and wages of $8,270 and $4,857, respectively, for the years ended on June 30, 
2000 and June 30,200 1. 
On December 3, 2002, the director requested additional evidence, including: (1) a description of the job 
duties, educational level, annual salaries/wages and immigration status for employees under the beneficiary's 
supervision; (2) a more detailed description of the beneficiary's duties in the United States; (3) copies of the 
petitioner's California Employment Development Department (EDD) Fonns DE-6, Quarterly Wage Report 
for all employees for the last four quarters that were accepted by the State of California; and (4) copies of its 
state and federal corporate income tax returns since the date of establishment. 
In response, the petitioner submitted a letter dated February 21, 2003, which incorporates the same job 
description submitted with the initial petition and quoted above. The petitioner also added the following 
explanation regarding the beneficiary's duties: 
[The beneficiary] analyzes the future goals and business objectives of [the petitioner]. [The 
beneficiary] makes all executive determinations regarding the purchases of new businesses on 
behalf of [the petitioner]. He was involved in all negotiations regarding expansion and 
acquisition of new businesses. In August 1998, [the beneficiary] negotiated the purchase of 
an additional store directly with 1. which did not result in an 
acquisition. In May, 2000, [the beneficiary] negotiated the purchase of a Subway franchise 
store located in Norwalk, California. After an accountant reviewed the financial statements of 
WAC 03 016 51061 
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this Subway store, [the beneficiary] rejected the purchase this business on behalf of [the 
petitioner.] As reviously stated, on February 14, 2003, the beneficiary negotiated the 
purchase of a hbusiness located in Laguna Beach, California. 
The petitioner submitted documentation as evidence of the beneficiary's attempts to purchase additional 
franchises, including a letter and receipt from GNC Franchising Inc., dated August 1998; a May 2000 letter 
from ; and a February 7, 2003 letter from ternational Corporation 
indicating that the beneficiary was granted preliminary approval to purchase franchise. The petitioner 
also submitted evidence that the beneficiary "opened an escrow" on the petitioner's behalf to purchase a 
business known as ' Service Experts," and provided the current owners' Forms DE-6 for the 
previous four quarters. 
With respect to the petitioner's staffing, the petitioner indicated that the U.S. company has hired a total of 
seven employees since 1997 but that "due to a high turnover, there is a constant change in the number of 
employees. The number of employees varies from 1 to 3." The petitioner noted that while it had only one 
employee at the time the petition was submitted, it subsequently hired two employees. The petitioner 
provided the following description of the claimed subordinate staff: 
the store in the absence of the president. She 
orks 20-30 hours per week and receives a salary of 
 his employee is responsible for stocking the store. He has a 
background as a physical fitness trainer works 15-20 hours per week and 
receives a salary of $439-585 per month. is a U.S. citizen. w 
The petitioner submitted a single Form DE-6, Quarterly Wage Report, which indicates that the petitioner paid 
10 000 in wages durin the fourth quarter of 2002, including $7,000 to the beneficiary, $1,750 to 
*d $1250 to- he petitioner failed to provide its Forms DE-6 for the previous 
our quarters as requested by the director. In addition, the petitioner provided the requested Forms 1120, U.S. 
Corporation Income Tax Returns for the years 1997 to 2001, reflecting payments as follows: (1) 1997- $5,000 
for compensation to officers and $3,098 in wages; (2) 1998 - No compensation to officers and $5,277 in 
wages; (3) 1999 - No compensation to officers and $8,720 in wages; (4) 2000 - No compensation to officers 
and $4,857 in wages; and (5) 2001 - 30,000 in compensation to officers and no salaries and wages. 
The director denied the petition on June 20, 2003, concluding that the petitioner did not establish that the 
beneficiary has been or will be functioning in a managerial or executive capacity. The director noted that 
there is insufficient evidence that the beneficiary has been exercising significant authority over generalized 
policy or that his duties have been primarily managerial or executive in nature. The director further noted that 
the record did not establish that the beneficiary would manage a subordinate staff of professional, managerial 
or supervisory personnel who will relieve him from performing non-qualifying duties. 
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Page 11 
On appeal, counsel for the petitioner contends, "the director's assertion that there is no indication that the 
beneficiary has been exercising significant authority over generalized policy or that the beneficiary's duties 
have been primarily managerial or executive in nature is unfounded." Counsel notes that the Form DE-6 
indicates the beneficiary is the highest paid employee, and emphasizes the beneficiary's role in extending the 
petitioner's lease in May 2002 and his role in negotiating the purchase of a new franchise operation in 2003 as 
evidence of his status as an executive with authority over the generalized policy of the company. Counsel 
further notes that the petitioner submitted evidence that it employs two employees who relieve the beneficiary 
from performing non-qualifying duties. 
In addition, counsel states: "In requiring proof that the beneficiary will not be performing 'non-qualifying 
duties,' (i.e., that the beneficiary will only perform qualifying duties) the Service reads in legal requirements 
that do not exist." Counsel asserts that the petitioner has satisfied its burden of establishing that the 
beneficiary's duties are primarily executive, such that "the mere inference that the beneficiary might be 
performing non-qualifying duties is irrelevant." Counsel also argues that by requiring the presence of a 
subordinate staff "the Service is indirectly requiring a numerical quantity of subordinate employees. Yet the 
service cannot infer the executive nature of the beneficiary on the basis of the number of subordinate 
employees." Counsel states that the reasonable need of the petitioner is such that "only a few" employees are 
required, and further notes that a beneficiary may qualify as a manager or executive even when no 
subordinate employees are supervised. Counsel cites an unpublished AAO decision in support of this 
assertion. 
Upon review of the petition and evidence, the petitioner has not established that the beneficiary has been or 
will be employed in a primarily managerial or executive capacity. When examining the executive or 
managerial capacity of the beneficiary, the AAO will look first to the petitioner's description of the job duties. 
See 8 C.F.R. 5 214,2(1)(3)(ii). The petitioner's description of the job duties must clearIy describe the duties to 
be performed by the beneficiary and indicate whether such duties are either in an executive or managerial 
capacity. Id. A beneficiary may not claim to be employed as a hybrid "executive/manager" and rely on partial 
sections of the two statutory definitions. A petitioner must establish that a beneficiary meets each of the four 
criteria set forth in the statutory definition for executive and the statutory definition for manager if it is 
representing that the beneficiary is both an executive and a manager. 
In this case, counsel asserts on appeal that the beneficiary qualifies as both a manager and an executive. 
However, rather than providing a specific description of the beneficiary's duties, the petitioner generalIy 
paraphrased the statutory definition of executive capacity. See section lOl(a)(44)(A) of the Act, 8 U.S.C. 5 
1101(a)(44)(A). For instance, the petitioner depicted the beneficiary as directing the management of the 
company, establishing the goals and policies of the organization, and exercising discretion over the 
generalized policy of the organization. However, conclusory assertions regarding the beneficiary's 
employment capacity are not sufficient to meet the petitioner's burden of proof. Merely repeating the 
language of the statute or regulations does not satisfy the petitioner's burden of proof. Fedin Bros. Co., Ltd. 
v. Sava, 724 F. Supp. 1 103, 1 108 (E.D.N.Y. 1989), afS'd, 905 F. 2d 41 (2d. Cir. 1990); Avyr Associates Inc. v. 
Meissner, 1997 WL 188942 at *5 (S.D.N.Y.). 
WAC 03 016 51061 
Page 12 
On review, the petitioner has provided a vague and nonspecific description of the beneficiary's duties that 
fails to demonstrate what the beneficiary does on a day-to-day basis. The petitioner indicated that the 
beneficiary "planned, implemented and carried out the business plan," "directed the expansion of the 
company's business," and "directed the purchase of new business operations" but has not explained its 
business plan or the actions taken to implement it, provided evidence of any expansion, or established that the 
petitioner actually purchased new business operations during the beneficiary's first five years in L-IA status. 
The petitioner further indicated that the beneficiary was responsible for "directing the marketing activities of 
the company," "reviewing finances" and "analyzing expenses," but does not clarify who actually performs 
routine marketing and bookkeeping duties for the petitioner, if not the beneficiary. Reciting the beneficiary's 
vague job responsibilities or broadly-cast business objectives is not sufficient; the regulations require a 
detailed description of the beneficiary's daily job duties. The petitioner has failed to answer a critical question 
in this case: What does the beneficiary primarily do on a daily basis? The actual duties themselves will reveal 
the true nature of the employment. Fedin Bros. Co., Ltd. v. Sava, 724 F. Supp. 1103, 1108 (E.D.N.Y. 1989), 
aff'd, 905 F.2d 41 (2d. Cir. 1990). The AAO cannot determine from the beneficiary's job description 
whether the beneficiary's duties are primarily managerial or executive; the AAO cannot be expected to accept 
a vague job description and speculate as to the related managerial and executive job duties. Merely claiming 
that the beneficiary is a manager or executive is insufficient to establish eligibility. 
The AGO notes that the petitioner and counsel place great emphasis on the beneficiary's executive role in 
planning the petitioner's expansion and acquisition of additional franchise businesses, suggesting that such 
planning and negotiating requires a significant portion of the beneficiary's time. While decisions involving 
the acquisition of new businesses may indeed be executive in nature, the record shows that in the five years 
preceding the filing of the instant petition, the beneficiary considered purchasing a total of two businesses and 
completed neither purchase. The most recent potential acquisition had taken pIace more than two years prior 
to the filing of the instant petition. Based on the evidence on record, the AAO cannot conclude that the 
beneficiary has devoted a significant portion of his time to negotiating the acquisition of additional businesses 
for the petitioner. Furthermore, although the petitioner has provided evidence that the petitioner was prepared 
to complete the purchase of a second franchise in March or April of 2003, the petitioner must establish 
eligibility at the time of filing the nonimrnigrant 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 of Michelin Tire 
Corp., 17 I&N Dec. 248 (Reg. Cornm. 1978). There is no evidence that the beneficiary was involved in 
efforts to purchase theAuto Services business at the time the petition was filed. Therefore, evidence 
submitted with respect to this business need not and will not be considered. 
Counsel correctly observes that a company's size alone, without taking into account the reasonable needs of 
the organization, may not be the determining factor in denying a visa to a multinational manager or executive. 
See 4 101(a)(44)(C) of the Act, 8 U.S.C. 5 1101(a)(44)(C). However, it is appropriate for CIS to consider the 
size of the petitioning company in conjunction with other relevant factors, such as a company's small 
personnel size, the absence of employees who would perform the non-managerial or non-executive operations 
of the company, or a "shell company" that does not conduct business in a regular and continuous manner. See, 
e.g. Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001). The size of a company may be especially 
relevant when CIS notes discrepancies in the record and faits to believe that the facts asserted are true. Id. If 
staffing levels are used as a factor in determining whether an individual is acting in a managerial or executive 
WAC 03 016 51061 
Page 13 
capacity, CIS must take into account the reasonable needs of the organization, in light of the overall purpose 
and stage of development of the organization. 
At the time of filing, the petitioner was a five-year-old retailer operating a store. The company 
employed the beneficiary as its president and no other employees. The petitioner faiIed to submit its Forms 
DE-6 for the fust three quarters of 2002; however, the petitioner's 2001 income tax return indicates that the 
petitioner did not have any employees, other than the beneficiary, between July 1, 2001 and June 30, 2002. 
The petitioner's financial statement for the calendar year ended on December 31, 2001 indicates that the 
petitioner budgeted no money for wages for the year, and paid a total of $1,172 in wages and benefits. In its 
first five years of operations, the petitioner never paid more than a total of $8,720 in wages in a single year. 
The petitioner did not submit evidence that it regularly employed anyone other than the beneficiary, much less 
a subordinate staff who would perform the actual day-to-day, non-managerial operations of the company. The 
petitioner operates a retail store that is likely open for business at least eight to ten hours a day, six days a 
week. The petitioner clearly requires employees to perform a number of non-managerial tasks, such as review 
and order inventory, stock merchandise on shelves, answer customer questions regarding its products, operate 
a cash register, reconcile daily sales, balance a checkbook, pay monthly bills, etc. Based on the petitioner's 
representations, it does not appear that the reasonable needs of the petitioning company might plausibly be 
met by the services of the beneficiary as president with the occasional, intermittent assistance of one or two 
part-time employees. Rather, at the time the petition was fiIed, and during much of the petitioner's first five 
years of operation, the beneficiary, as the only employee, would have been required to perform many or all of 
the routine administrative and operational duties inherent in operating a retail healthcare products store. 
Although the petitioner and counsel assert that the beneficiary's duties are primarily executive or managerial, 
it is clear from the record that the reasonable needs of the petitioner would require that the beneficiary work in 
the store performing nonqualifying duties on a full-time, or near full-time basis. 
On appeal, counsel places great weight on the petitioner's Form DE-6, Quarterly Wage Report, for the fourth 
quarter of 2002 as evidence that the beneficiary supervises a subordinate staff which relieves him from 
performing non-qualifying duties. The Form DE-6 indicates that the petitioner had three employees in 
October, November and December 2002. According to a notation on the report, in order to be included on the 
form, the employees must have been on the petitioner's payroll during the pay period that included the twelfth 
day of each month. The petition was submitted on October 21, 2002, and the petitioner concedes that it had 
only one employee as of that date. Therefore, it is not clear why the two new employees would be included in 
the petitioner's headcount for October 2002 on its Form DE-6. 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). Given this 
discrepancy, a photocopy of the first page of the Form DE-6, which has not been certified by the California 
EmpIoyrnent Development Department, is insufficient to establish when or if the petitioner hired the claimed 
subordinate staff. RegardIess, as noted above, the petitioner must establish eligibility at the time of filing the 
nonirnrnigrant 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 of Michelin Tire COT., 17 T&N Dec. 248 (Reg. 
Cornm. 1978). 
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Page 14 
The AAO does not dispute that the beneficiary does indeed exercise discretion over the petitioner's business 
operations. However, it can be assumed, and has not been proven otherwise, that the beneficiary, who is more 
often than not the petitioner's sole employee, has been performing many or all of the routine operational tasks 
necessary to operate a retaiI store. An employee who primarily performs the tasks necessary to produce a 
product or to provide services is not considered to be employed in a managerial or executive capacity. Matter 
of Church Scientology International, 19 I&N Dec. 593, 604 (Comm. 1988). Furthermore, it is evident that 
such duties would, by necessity, be his primary duties. The store could not operate if its only full-time 
employee, and often its only employee, did not work in the store on a full-time basis. The reasonable needs of 
the petitioner may justify a beneficiary who allocates 51 percent of his duties to managerial or executive tasks 
as opposed to 90 percent, but those needs will not excuse a beneficiary who spends the majority of his or her 
time on non-qualifying duties. 
Counsel states on appeal that the "mere inference that the beneficiary might be performing non-qualifying 
duties is irrelevant." However, the statute requires that an individual "primarily" perform managerial or 
executive duties in order to qualify as a managerial or executive employee under the Act. The word 
"primarily" is defined as "at first," "principally," or "chiefly." Webster's I1 New College Dictionary 877 
(2001). Where, as here, an individual is "principally" or "chiefly" performing the tasks necessary to produce 
a product or to provide a service, that individual cannot also "principally" or "chiefly" perform managerial or 
executive duties. 
Counsel further refers to an unpublished in which the AAO determined that the beneficiary met the 
requirements of serving in a managerial and executive capacity for L-1 classification even though he was the 
sole employee. Counsel has furnished no evidence to establish that the facts of the instant petition are 
analogous to those in the case cited. Going on record without supporting documentary evidence is not 
sufficient for purposes of meeting the burden of proof in these proceedings. Matter of Sofici, 22 I&N Dec. 
158, 165 (Comm. 1998) (citing Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 
1972)). Furthermore, while 8 C.F.R. 3 103.3(c) provides that AAO precedent decisions are binding on all CIS 
employees in the administration of the Act, unpublished decisions are not similarly binding. 
The fact that an individual manages a small business does not necessarily establish eligibility for classification as 
an intracompany transferee in a managerial or executive capacity within the meaning of section IOl(a)(44) of the 
Act. The record does not establish that a majority of the beneficiary's duties have been or will be primarily 
directing the management of the organization. The record indicates that a preponderance of the beneficiary's 
duties have been and will be directly providing the services of the business. As noted above, an employee who 
primarily performs the tasks necessary to produce a product or to provide services is not considered to be 
employed in a managerial or executive capacity. Matter of Church Scientology International, 19 I&N Dec. 593, 
604 (Comm. 1988). The petitioner has not demonstrated that it has reached or will reach a level of organizational 
complexity wherein the hiring!fIring of personnel, discretionary decision-making, and setting company goals and 
policies constitute significant components of the duties performed on a day-today basis. Nor does the record 
demonstrate that the beneficiary primarily manages an essential function of the organization or that he operates at 
a senior level within an organizational hierarchy. Based on the evidence furnished, it cannot be found that the 
beneficiary has been or will be employed primarily in a qualifying managerial or executive capacity. For this 
reason, the petition may not be approved. 
WAC 03 016 51061 
Page 15 
Finally, it is noted that the director's decision does not indicate whether he reviewed the prior approvals of the 
other nonimrnigrant petitions submitted by the petitioner on behalf of this beneficiary. If the previous 
nonimrnigrant petitions were approved based on the same unsupported and contradictory assertions that are 
contained in the current record, the approval would constitute material and gross error on the part of the 
director. The AAO is not required to approve applications or petitions where eligibility has not been 
demonstrated, merely because of prior approvals that may have been erroneous. See, e.g. Matter of Church 
Scientology International, 19 I&N Dec. 593, 597 (Cornrn. 1988). It would be absurd to suggest that CIS or 
any agency must treat acknowledged errors as binding precedent. Sussex Engg. Ltd. v. Montgomery, 825 F.2d 
1084, 1090 (6th Cir. 1987), cen. denied, 485 U.S. 1008 (1988). 
The petition will be denied for the above stated reasons, with each considered as an independent and 
alternative basis for denial. In visa petition proceedings, the burden of proving eligibiIity for the benefit 
sought remains entirely with the petitioner. Section 291 of the Act, 8 U.S.C. 8 1361. Here, that burden has 
not been met. Accordingly, the director's decision will be affirmed and the petition will be denied. 
ORDER: The appeal is dismissed.