Guide to “Successor in Interest” for Employment-Based Green Cards/I-140 Petitions

In the modern corporate landscape, mergers, acquisitions, and reorganizations are routine. However, when a company undergoes restructuring, the immigration status of its sponsored foreign workers can be put at risk.

To prevent corporate changes from invalidating an employee’s approved PERM Labor Certification or Form I-140 petition, U.S. Citizenship and Immigration Services (USCIS) allows a new corporate entity to take over the green card sponsorship if it qualifies as a “Successor-in-Interest” (SII).

The rules governing this process are rooted in a combination of Department of Labor (DOL) delegations, administrative case law, and pivotal USCIS policy memorandums—most notably the August 6, 2009, Neufeld Memorandum.

The Legal Evolution of the Successor-in-Interest Rule

The authority for USCIS to adjudicate employer changes on a labor certification stems from a March 1992 inter-agency agreement where the DOL delegated this specific power to the legacy Immigration and Naturalization Service (INS).

Historically, establishing a valid SII relationship was extremely rigid under legacy INS 1993 Puleo Memorandum which instructed adjudicators to approve an SII petition only if the successor company assumed all of the rights, duties, obligations, and assets of the original employer.

Recognizing that this strict requirement was incompatible with modern M&A realities, USCIS Acting Associate Director Donald Neufeld issued the 2009 Neufeld Memorandum (officially titled Successor-in-Interest Determinations in Adjudication of Form I-140 Petitions).

The Neufeld Memo officially updated Chapter 22.2(b)(5) of the Adjudicator’s Field Manual (AFM) and superseded the 1993 Puleo Memo. The memo clarified that the BIA never actually required a 100% assumption of liabilities. The 2009 Neufeld memo established that a successor simply needs to follow another in the ownership or control of property and retain the same rights “with no change in substance”. For example, a successor can safely exclude liabilities related to pending litigation or tort obligations (like sexual harassment suits) and still qualify as an SII.

The Three Mandatory Factors for a Successor-in-Interest

Under the framework established by the 2009 Neufeld Memorandum, an entity must satisfy three strict factors to be considered a valid Successor-in-Interest. All three must be thoroughly documented:

1. The Job Opportunity Must Remain the Same

The job offered by the new successor company must remain identical to the job originally offered on the approved labor certification.

• No Changes to the Labor Market Test: USCIS will deny an SII claim if the successor requests changes to the job description or requirements that, had they been made at the time the labor certification was filed with the DOL, could have affected the number or type of U.S. workers who applied.

• Rate of Pay: The successor must pay the required wage, though an increase in the rate of pay due to the passage of time is fully permitted and does not affect the SII claim.

• No Substantial Lapse in Operations: The job opportunity must remain valid and available. If the predecessor ceases operations before the transfer, or if there is a substantial lapse in business operations after the transfer (e.g., closing a business for six months of renovations), the original job opportunity ceases to exist, and a new labor certification is required.

2. Proof of Continuous “Ability to Pay” and Eligibility

The successor bears the burden of proving eligibility in all respects, dating back to the exact date the original labor certification was filed (the “priority date”).

• The Predecessor’s Timeline: The petitioner must provide evidence of the predecessor’s ability to pay the proffered wage from the date the labor certification was filed with the DOL up until the date of the transfer of ownership. If the successor only purchased a discrete operational division of the predecessor, the predecessor’s ability to pay is still analyzed using the financial data of the entire predecessor entity, not just the sold business unit.

• The Successor’s Timeline: The successor must prove it meets the definition of an “employer” and has the financial ability to pay the wage from the date of the ownership transfer continuously until the employee obtains their green card.

3. Transfer of Ownership

The petitioner must fully describe and document the transfer and assumption of ownership of the predecessor by the successor. This transfer can occur at any point after the original labor certification has been approved.  The petitioner must fully describe and document how the successor has acquired the essential rights and obligations of the predecessor necessary to carry on the business in the same manner.

• Required Evidence: Acceptable evidence outlined in the Neufeld Memo includes contracts of sale, SEC Form 10-K filings, audited financial statements for the year of the transfer, mortgage closing statements, documentation of transferred real property and business licenses, copies of financial instruments used to execute the transfer, and media reports of the acquisition.

What Qualifies as a Valid Transfer of Ownership?

For a valid SII relationship to exist, the petitioner must fully describe and document how the successor assumed ownership of the predecessor. The core principle is that the successor must acquire the essential rights and obligations of the predecessor necessary to carry on the business in the same manner.

The Neufeld Memo explicitly outlines the situations and structures that satisfy this requirement:

1. Acceptable Transaction Types and Corporate Structures

The legal transfer of ownership can occur through a variety of standard corporate transactions, including mergers, acquisitions, or reorganizations. USCIS is flexible regarding the specific legal structure of the entities involved. The transaction can involve differing organizational structures, such as:

• General Partnerships or Limited Partnerships

• Limited Liability Partnerships (LLPs)

• Limited Liability Companies (LLCs)

• Regular “C” Corporations or Subchapter “S” Corporations

2. Whole vs. Partial Transfers (The “Discrete Unit” Rule)

A common misconception is that a successor must buy the entire predecessor company to inherit its immigration petitions. The Neufeld Memo clarifies that “partial transfers” or spin-offs frequently qualify, provided strict conditions are met.

If the acquiring entity purchases a discrete operational division or unit (rather than the whole company), it qualifies as an SII if:

• It is clearly defined: The unit being transferred must be a clearly defined, standalone operational division within the predecessor entity. Examples include a specific manufacturing division with its own plant, equipment, and management, or a specific branch office of a bank.

• It is transferred as a whole: The successor must buy that specific unit in its entirety.

• The sponsored employee belongs to that unit: The job offered to the foreign worker must have been, and must continue to be, located strictly within that specific transferred unit.

3. The “Unrelated Liabilities” Exception

Under older, stricter rules, a successor had to assume 100% of a predecessor’s liabilities to qualify. The Neufeld Memo specifically overturned this, acknowledging that in legitimate business transactions, a buyer may want to leave certain toxic liabilities behind.

A situation qualifies for an SII relationship even if the successor refuses to assume liabilities that are completely unrelated to the sponsored job opportunity. For example, a successor can explicitly carve out and refuse to assume the liability for pending sexual harassment litigation or other tort obligations, and still be recognized as a valid Successor-in-Interest.

What Qualifies vs. What Doesn’t: Real-World Scenarios from the Neufeld Memo

The Neufeld Memorandum outlines specific examples of how USCIS evaluates complex business transactions:

✅ Scenario A: The Division Spin-Off (Qualifies)

A chemical wholesale corporation sells its distinct manufacturing division to another chemical manufacturer. The division has its own plant, equipment, and management structure that is readily divisible from the parent company. Because the manufacturing division is a clearly defined unit transferred as a whole (with the exception of unrelated liabilities), the buyer qualifies as a Successor-in-Interest for the foreign workers employed within that division.

❌ Scenario B: Buying Intellectual Property Only (Does Not Qualify)

Company A sells a patented chemical formula to Company B, allowing Company B to manufacture a product. Company A stops making the product, and Company B hires Company A’s sponsored worker. This does not create a valid SII relationship because Company B merely bought manufacturing rights, not a clearly defined business unit with its related assets. A new green card process is required.

❌ Scenario C: Outsourcing and Contracting (Does Not Qualify)

Company A has an approved labor certification for a computer systems analyst. Company A then signs a contract to outsource its IT services to Company B, effectively transferring the sponsored worker’s duties to Company B. Because contractual agreements do not result in the transfer of ownership of Company A’s actual business interests to Company B, there is no valid SII relationship.

When a Successor-in-Interest Filing is NOT Needed

Not every corporate change requires filing complex SII amendments with USCIS. The following situations are exempt:

• Simple Name Changes: If a petitioning employer legally changes its name, or updates its “doing business as” (DBA) name, but its ownership and legal structure remain exactly the same, an amended I-140 petition is not required.

• Minor Location Changes: If the company moves to a new office, an amended I-140 is not required as long as the new location is still within the original “area of intended employment” designated on the labor certification.

• Self-Sponsored Petitions: Visa categories that do not require a corporate labor certification—such as the EB-1 Alien of Extraordinary Ability or the EB-2 National Interest Waiver (NIW)—are exempt from SII requirements.

• AC21 Portability (INA § 204(j)): A major statutory carve-out exists under Section 106(c) of the American Competitiveness in the Twenty-First Century Act (AC21) and Section 204(j) of the Immigration and Nationality Act (INA). Under these regulations, an I-140 petition “remains valid” if the employee’s final green card application has been pending, and they port to a new employer. In cases where an alien is eligible for AC21 portability, a successor entity does not need to file a new or amended petition, provided the new job is in the “same or similar” occupational classification.

Mechanics and How to File?

If a valid SII relationship exists and the AC21 exception does not apply, the successor company must file an amended Form I-140 petition (or an initial I-140, if only the labor certification was approved prior to the transfer). The petition must include the original labor certification, proof of both companies’ ability to pay, and the full suite of corporate M&A documentation proving the transfer of ownership.

For large-scale acquisitions involving multiple foreign workers, the Neufeld Memo explicitly allows employers to request “consolidated processing”. This permits a single USCIS service center director to accept consolidated evidence (e.g., one copy of an SEC Form 10-K for 20 petitions) to streamline the adjudication of multiple successor petitions affected by the same transfer of ownership.

Conclusion

With corporate transactions becoming increasingly complex and USCIS closely scrutinizing the continuity of employment-based sponsorships, we urge employers to evaluate the immigration impact of any merger, acquisition, or restructuring as early as possible. Conducting a thorough successor-in-interest analysis before a corporate transaction is finalized is essential to ensuring a seamless transition and protecting the green card processes of your key foreign national employees.

Our office handles a heavy volume of complex corporate restructuring and successor-in-interest cases. If your company is undergoing a merger, acquisition, or spin-off, we can help you analyze the transaction, assess the viability of a successor-in-interest claim, and prepare the necessary Form I-140 amendments. Please contact us for a consultation or to request a quote for our services.  Also, we invite you to subscribe to our free weekly newsletter to obtain further news and developments on this topic.