remanded L-1B Case: Software Services

(b)(6)
MATTER OF K- LLC 
Non-Precedent Decision of the 
Administrative Appeals Office 
DATE: NOV. 16, 2016 
APPEAL OF CALIFORNIA SERVICE CENTER DECISION 
PETITION: FORM I-129, PETITION FOR A NONIMMIGRANT WORKER . 
The Petitioner, a provider of software , research , training, and advisory services for the non-profit 
sector, seeks to temporarily employ the Beneficiary as a senior business analyst under the L-1 B 
nonimmigrant classification for intracompany transferees. See Immigration and Nationality Act (the 
Act) section 101(a)(15)(L) , 8 U.S.C. § 1101(a)(15)(L) . The L-IB classification allows a corporation 
or other legal entity (including its affiliate or subsidiary) to transfer a qualifying foreign employee with 
"specialized knowledge " to work temporarily in the United States. 
The Director, California Service Center, concluded that the evidence of record did not establish that 
the Beneficiary has been employed abroad in a managerial , executive or specialized knowledge 
position, that he possesses specialized knowledge , or that will be employed in the United States in a 
specialized knowledge capacity. 
The matter is now before us on appeal. In its appeal, the Petitioner asserts that the Director's 
decision is based on an incorrect application of relevant law and policy and incorrect based on the 
evidence submitted. The Petitioner contends that it has established by a preponderance of the 
evidence that the Beneficiary possesses specialized knowledge of its products and services and their 
application in international markets, and that this knowledge is required by both his current and 
proposed positions. 
Upon de novo review, we conclude that the Petitioner has provided sufficient evidence to overcome 
the Director's findings. Specifically, the evidence of record establishes that the Beneficiary 
possesses both special knowledge of the company ' s proprietary software developed by 
his foreign employer and advanced knowledge of the processes and procedures used to customize 
and implement this product for the company ' s clients. The record establishes that the Beneficiary 
has nearly six years of progressive experience with the foreign entity gained in both technical and 
lead business roles during which time he has been involved in both the development of the product 
and processes, which has given him a depth of knowledge of the company's products and niche 
market that is advanced in comparison to others within the organization. The Petitioner ' s claims are 
well-supported by evidence of the Beneficiary's duties, work product, and progressive roles within 
the organization. Further, the Petitioner has provided a detailed explanation of the need for his 
specialized knowledge in the proposed l!.S. role. 
Matter of K- LLC 
Notwithstanding our findings with regard to the Director's grounds for denial, we find that the 
Petitioner has not provided sufficient evidence to establish that the Petitioner and the Beneficiary's 
foreign employer have a qualifying relationship. Therefore, we hereby remand this matter to the 
Director for further proceedings and entry of a new decision. A discussion of our findings is 
provided below. 
I. LEGAL FRAMEWORK 
To establish eligibility for the L-1 nonimmigrant visa classification, a qualifying organization must 
have employed the Beneficiary in a 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. Section 101(a)(l5)(L) of the Act. 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. !d. 
The regulation at 8 C.F.R. § 214.2(1)(3) states that an individual petition filed on Form I-129, 
Petition for a Nonimmigrant Worker, 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. 
(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 him/her 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. 
II. QUALIFYING RELATIONSHIP 
To establish a "qualifying relationship" under the Act and the regulations, a 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) ofthe Act; 8 C.F.R. § 214.2(1). 
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Matter of K- LLC 
The pertinent regulations at 8 C.F.R. § 214.2(l)(l)(ii) define the term "qualifying organization" and 
related terms as follows: 
(0) QualifYing 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 subsidiar y specified in 
paragraph (1)(1 )(ii) of this section; 
(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) Affiliate means 
(1) 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 .... 
A. Evidence of Record 
The Petitioner filed the Form 1-129 on April 25, 2016. On the L Classification Supplement to 
Form I-129, the Petitioner identified the Beneficiary's current employer in Kenya as 
and stated that the U.S. company is an affiliate of the foreign entity based on the following 
description of the ownership and control of each company: 
[The Petitioner] is owned 55% by and 45% by 
& appoint the Board of Directors and control & manage 
the company . . .. 
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Matter of K- LLC 
is owned 45% by and 40% by 
and are the majority shareholders and control and 
constitute the Board of Directors. They have full control over the company and 
manage the company. 
The Petitioner provided the foreign entity's "Memorandum of Association" showing that 20 shares 
were originally distributed on April 6, 2006, as follows: 
12 shares 
2 shares 
5 shares 
1 share 
According to the foreign entity's "Membership Issuance/Transfer Ledger," transferred 
three ofhis shares to on December 11, 2015, resulting in owning 9 shares, or 
45%, of the foreign entity and owning 8 shares, or 40%, of the foreign entity.1 The 
Petitioner also provided the foreign entity's memorandum of association and articles of association. 
The Petitioner submitted. a letter from a representative of 
Secretaries, attesting to the foreign entity's ownership and control: 
Certified Public 
is owned and controlled by who holds 45 percent 
of the issued share capital and who owns 40 percent of the 
issued share capital. Under the company's Memorandum & Articles of association , 
the Board of Directors is selected by members in an Annual General meeting. 
Currently, the Directors of the company are and Because 
shareholders have the power to select the Board of Directors, they control the 
company. Note that when the company was formed Kenyan law required local 
investment. This requirement is met through the minority ownership of a small 
amount of issued share capital by (1 0%) and 
(5%). However, neither of these individuals have the ability to 
exercise control over the company. 
With respect to the Petitioner's ownership , it provided a copy of its certification of formation as a 
Delaware limited liability company, a copy of its by-laws (which refer to the company as a 
"Delaware Corporation"), copies of its membership certificates numbers 2 and 3, a board of 
directors' resolution, and a copy of its membership issuance/transfer ledger. 
The membership certificates show that and initially each owned a 50 percent 
interest in the petitioning company as of July 1, 2006. The membership issuance/transfer ledger 
1 We note that a document in the record entitled "Form of Annual Return of a Company Having a Share Capital " for 
2015 indicates on a "List of Past and Present Members" that the transfer of the three shares to was registered 
on December 8, 2015 . 
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Matter of K- LLC 
shows that on December 11, 2015, transferred a 5% interest to resulting in 
owning a 55% interest. However, the board of directors' resolution, which is also dated 
December 11, 2015, indicates that acquired 10 newly created and issued shares on that 
date, resulting in his ownership of 55 out of 100 shares, or a 55% interest in the company. 
The Petitioner 's bylaws, as noted, refer to the limited liability company ' s owners as "shareholders ." 
The bylaws indicate that the stockholders are responsible for electing the board of directors , that 
each stockholder is entitled to one vote per share of stock, and that the holders of a majority of the 
stock shall constitute a quorum at shareholder meetings for the transaction of business. The bylaws 
further provide that the board of directors manages "the business of the corporation." 
In its letter in support of the petition, the Petitioner emphasized that it has an affiliate relationship 
with since both companies are "majority owned and controlled by and 
The Petitioner stated that these individuals have the power to appoint the Board of Directors 
of both companies , constitute the board of directors of both companies , and have the power to 
manage the operations of both companies and appoint the executive team ofboth companies. 
Finally, the Petitioner stated: 
[The foreign entity and Petitioner] are affiliates under the L-1 regulations . . . . 
Identical ownership is not required by the L-1 regulations as long as there is common 
control. See Sun Moon Star Advanced Power, Inc. v. Chappell , 773 F. Supp. 1373 
(N.D. Ca. 1990). Matter of 1 (AAU Sept. 3, 1993). See 
also Matter of Tessel, Inc., 17 I&N Dec. 631 (1981 ). As these cases emphasize , the 
key factor in determining the existence of a qualifying relationship is common 
ownership leading to common control. 
B. Analysis 
Upon review, the evidence of record as presently constituted does not establish that the Petitioner 
and the foreign entity have a qualifying affiliate relationship. 
The regulation and case law confirm that ownership and control are the factors that must be 
examined in determining whether a qualifying relationship exists between United States and foreign 
entities for purposes of this visa classification . See Matter of Church Scientology Int '1, 19 I&N Dec. 
593 (BIA 1988); see also Matter of Siemens Me d. Sys., Inc., 19 I&N Dec. 362 (BIA 1986); Matter of 
Hughes, 18 I&N Dec. 289 (Comm'r. 1982). In the context of this visa petition, ownership refers to 
the direct or 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 o.fChurch Scientology Int 'l, 19 I&N Dec. at 595. 
Citing Sun Moon Star Advanced Power, Inc. v. Chappel , 773 F. Supp. 1373 (N.D. Cal 1990), the 
Petitioner 
asserts that two companies may be affiliated even though they are not owned by the exact 
same individuals . In the Sun Moon Star decision , the former Immigration and Naturalization Service 
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(b)(6)
Matter of K- LLC 
(INS, now U.S. Citizenship and Immigration Services (USCIS)) refused to recognize the indirect 
ownership of the petitioner by three brothers owning shares of the company as individuals through a 
holding company. The 9ecision stated that the two claimed affiliates were not owned by the same 
group of individuals. The court found that the former INS decision was inconsistent with previous 
interpretations of the term "affiliate" and contrary to congressional intent because the decision did 
not recognize indirect ownership. Prior to the adjudication of the Sun Moon Star petition, the INS 
amended the regulations so that the definition of "subsidiary " recognized indirect ownership. See 52 
Fed. Reg. 5738, 5741-2 (February 26, 1987). Accordingly, the basis for the court's decision has 
been incorporated into the regulations. However, despite the amended regulation and the decision in 
Sun Moon Star, neither the former INS nor USCIS has ever accepted a combination of individual 
shareholders as a single entity, so that the group may claim majority ownership, unless the group 
members have been shown to be legally bound together as a unit within the company by voting 
agreements or proxies. 
To establish eligibility in this case, it must be shown that the Petitioner and the foreign entity share 
common ownership and control. Control may be de jure by reason of ownership of more than 50 
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'r 1982). 
Here, the Petitioner claims that and together own and control a majority 
interest in both the U.S. and foreign entities. The Petitioner's claim of common majority control by 
these two individuals is based on their membership on both companies' boards of directors, and not 
on any agreement to vote together as a unit on the basis of their membership interests. 
Further, this claim overlooks the fact that by virtue of his 55% ownership interest in 
the Petitioner, exercises de jure control over the U.S. company. His majority membership interest is 
sufficient to constitute a quorum for shareholder voting purposes under the company's by-laws, and 
his vote cannot 
be overruled by While the Board of Directors may manage the company's 
business operations, voting power over certain affairs still rests with the owners. 
With respect to the foreign entity, no one owner holds a majority interest in the company. However , 
either (with 45% ownership), or (with 40% ownership), could combine their 
voting interest with the two minority owners to effectively cancel out the other individual's vote. 
While they are the sole members of the board of directors, there is insufficient evidence to establish 
that either individual exercises de facto control over the entity. Absent documentary evidence such 
as voting proxies or agreements to vote in concert, the Petitioner has not established that the same 
individual or group of individuals owns and controls both entities. 
Further, as noted, there are some unexplained irregularities in the submitted evidence. Specifically, 
the record contains two different explanations relating to the transfer or issuance of shares to 
in December 2015, and bylaws for the Petitioner which refer to the limited liability 
company as a corporation. 
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Matter of K- LLC 
Finally, we note that the Petitioner cited Matter of Tessel, Inc., 17 I&N Dec. 631 (Acting Assoc. 
Comm 'r 1981) in support of a claim that common majority stock ownership in both companies is 
sufficient for the purposes of establishing a qualifying relationship. In the Tessel decision, the 
beneficiary solely owned 93% of the foreign entity and 60% of the petitioner, thereby establishing a 
"high percentage of common ownership and common management .... " The decision further stated 
that "[w]here there is a high percentage of ownership and common management between two 
companies, either directly or indirectly or through a third entity, those companies are 'affiliated' 
within the meaning of that term as used in section 101(a)(15)(L) of the Act." ld. at 633. However, 
the facts in the present matter can be distinguished from Matter of Tessel as no one shareholder 
holds a majority interest in both corporations. 
For these reasons, the record as presently constituted does not establish that the Petitioner and 
foreign entity have a qualifying relationship. 
III. CONCLUSION 
We will remand this matter to the Director for further review and entry of a new decision. The 
Director should request any additional evidence deemed warranted and allow the Petitioner to 
submit such evidence within a reasonable period of time. 
In visa petition proceedings, it is the petitioner's burden to establish eligibility for the immigration 
benefit sought. Section 291 of the Act, 8 U.S.C. § 1361; Matter of Otiende, 26 I&N Dec. 127, 128 
(BIA 2013). 
ORDER: The decision of the Director, California Service Center, is withdrawn. The matter is 
remanded to the Director, California Service Center, for further proceedings 
consistent with the foregoing opinion and for the entry of a new decision. 
Cite as Matter of K- LLC, ID# 102499 (AAO Nov. 16, 2016)