A recent policy memorandum from U.S. Citizenship and Immigration Services (USCIS) clarifies a 1982 precedent decision, Matter of Hughes, by instructing officers that proxy votes must be irrevocable from the time of filing the L-1 petition through adjudication to establish a qualifying relationship. The petitioner must file an amended petition if any changes of ownership and control of the organization occur after USCIS adjudicates the petition.
The memo notes that although Matter of Hughes focused on joint venture scenarios, issues of ownership and control can arise in other circumstances. Specifically, owners of entities often use proxy votes to determine control of the entity. In typical proxy voting cases, a person is authorized to vote equity owned by another. Neither Matter of Hughes nor previous USCIS guidance have addressed whether proxy votes must be irrevocable to establish control, the memo states.
The fact that proxies may be revoked is an issue when establishing control of a company through proxy votes, the memo notes. A petitioner can show control by submitting documentation demonstrating that one or more equity holders irrevocably granted the ability to vote their equity to another equity holder, thereby effectively (and legally) giving the other equity holder “control” over the company or companies in question. The memo notes that such documentation may include relevant evidence regarding the legal framework under which the proxy was granted (such as the laws of the jurisdiction in which the entity is organized and the jurisdiction in which any agreements were executed), the organizational documents of the entity, irrevocable proxy agreements, official meeting minutes detailing the irrevocable proxy, and an affidavit from the proxy-granting equity holder with sufficient specificity regarding the details of the irrevocable proxy.
As always, the memo states, the petitioner bears the burden of proof and the evidence the petitioner provides must be credible and sufficient for the adjudicator to determine eligibility. “If a petitioner cannot demonstrate the requisite common ownership and control from the time of filing through the time USCIS adjudicates the petition, it fails to establish a qualifying relationship,” the memo states. “Further, changes of ownership and control of the organization post-adjudication may constitute a substantial change in circumstances or new material information requiring re-adjudication by USCIS to ensure compliance with the regulations. In such cases, the petitioner must file an amended L-1 petition.”