On this page:
- Transfer of Business
- Taking Over a UI Account
- UCT-115, Report of Business Transfer Form
- When You Must Take Over the UI Account Experience of the Former Owner/Operator
- Effects of Taking Over a UI Account
- UI Tax Rates If You Take Over An Account
- Becoming a Newly Covered Employer Without Taking Over the UI Account of the Former Owner/Operator
Unemployment Insurance Handbook for Employers (UCB-201-P)
Section 2 - Tax
A. Transfer of Business
A transfer of business occurs any time a business activity or
business asset is transferred outside of the normal course of doing business.
The usual way that a business is transferred is through a sale,
lease, reorganization, merger or consolidation. However, a business can also be
transferred through foreclosures, inheritances and bankruptcy.
In any transfer, the transferor is the seller or former
owner/operator of the business being transferred and the transferee is the buyer or new
owner/operator of the business.
It is not necessary for a transfer to occur directly between the
former owner/operator and the new owner/operator. Third parties such as landlords,
financial institutions and the courts are often intermediaries for transfers.
Some common situations that ARE NOT a transfer of business:
- Sale of corporate stock.
- Corporate name change.
- Sale of assets in the ordinary course of business.
- Transfer of employees only or transfer of payroll function
- A corporation changing from or to Subchapter S status.
Possible Consequences of a Transfer
A transfer of business may have important consequences for your business's UI tax rate and reserve account.
- The impact can be positive if you take over the UI account of a business with a low rate.
- The impact can be negative if you take over the account of a business with a high tax rate.
When You Transfer or Acquire a Business
When you transfer or acquire a business, you must let us know within 30 days of the sale/acquisition.
Notice can be done by:
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B. Taking Over a UI Account
Successorship occurs when all or a portion of the former owner's
UI account is transferred to the new owner due to a transfer of all or a portion of the
- mandatory when related interests are involved
- optional for unrelated interests
See D: When You Must Take Over the UI Account Experience of the Former Owner/Operator.
When successorship occurs, the employer who has taken over the
former owners/operators account is referred to as the "successor".
The employer whose UI account (and business activity) was taken over is referred to as the
The words successorship, successor and predecessor are used in the legal language of the UI law.
If you are acquiring an existing business, you may have a choice as to whether or not you take over the UI experience of the former owner/operator. The following sections give you more information regarding business transfers and taking over the former owners/operators UI account.
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C. UCT-115, Report of Business Transfer Form
The Report of Business Transfer (http://dwd.wisconsin.gov/dwd/forms/UI/uct_115_e.htm) form is the primary form used by the department to obtain information on business transfer. The form is generally requested from both parties. The form can also be used by the new owner/operator to make a written application to take over the UI account of the former owner/operator.
The sections on the forms are numbered and labeled. Following is a brief description of these sections.
- Former Owner/Operator
- This information will identify the former owner/operator. It is
important to list the current mailing address and telephone number,
which may have changed since the transfer. When completing the form,
if there is some information which you do not know, enter
"unknown" in the space or leave it blank.
- New Owner/Operator
This information identifies the new owner or operator who acquired
the business. It is important to list the names and ownership
percentages of the individuals who currently own or control the
When completing the form, if there is some information which you do
not know enter "unknown" in the space or leave it blank.
- Relationship Between Parties
It is necessary that you compare the former ownership with the
current ownership and indicate if there are any common owners or any
that are related through immediate family. See the examples identified
in the questions.
If there is no relationship or common interest at all between the
parties, then the new owner/operator should complete Section 5, Option
of New Owner/Operator of the form. The new owner/operator can apply to
take over the UI experience of the former owner/operator or can decide
not to apply. While the application to take over the UI account does
not necessarily have to be done when this form is completed, there is
a deadline for making a timely application. The deadlines are shown in
- Effective Dates
- Enter the effective or legal date when the new owner/operator has
control over the business transferred. This is known as the transfer
- Option for New Owner/Operator
- This section provides the new owner the option to acquire the UI
experience of the previous owner, elect not to acquire the experience
or to request additional information before making a decision.
- Method of Transfer
- Provides a checklist of the methods of selling/acquiring a business
(sale, lease, reorganization, merger, etc.).
- Assets Transferred
- Provides a checklist of assets sold/acquired (real estate,
inventories, accounts receivable, etc.).
- Continuation of Business
- This section asks whether the new owner/operator continued the
business without interruption and in the same location. If there was a
period of time when the business was not operated or there has been a
change of business location, please provide additional information.
- Number of Employees
- Asks the question how many employees worked in the transferred
business prior to the transfer and how many employees continued with
the new owner/operator.
- Identify Nature of Business Transferred
- This could be information about the method of transfer (third party
transfers, leases, reorganizations, foreclosures, estates and
receiverships) or information about which assets were transferred and which were not, or information describing that two or more
transfers took place and the dates of those transfers.
- Total or Partial Transfer
Indicate whether the transfer was total or partial. If all the former owner's/operator's business activity has
been transferred and they will no longer have payroll, the transfer
is total. In a total transfer, the former owner/operator must tell
us if there will be payroll after the transfer date for closing of
accounts and liquidation of assets.
If the former owner/operator will continue to operate some
portion of business they operated before the transfer, the transfer
is considered partial.
- Required Signature
- This form can be submitted on behalf of either the former or new
owner/operator. In some cases the form can be submitted on behalf of
both people. The form should be signed by the person submitting the
form or their representative such as an attorney or an accountant.
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D. When You Must Take Over the UI Account Experience of the Former Owner/Operator
If a transfer occurs between employers that are owned or
controlled by similar interests or members of the same immediate family, taking over the
UI account experience of the former owner/operator is mandatory.
Some examples are:
- a sole proprietor incorporating his or her business,
- a subsidiary corporation merging with the parent,
- and a person transferring a business to a spouse, child or parent or a seller and a buyer who have common ownership or control.
If a transfer occurs between employers that are owned and controlled by unrelated interests, taking over the UI account experience of the former owner/operator is optional. To qualify for this option, the new owner/operator must file a written application by the contribution report deadline for the quarter following the quarter in which the transfer occurred.
|If date of change is
||You must apply by:
|January 1 to March 31
|April 1 to June 30
|July 1 to September 30
|October 1 to December 31
Because of this application deadline, it is
important that employers notify us immediately of transfers and
acquisitions of business or assets. Beginning with transfers occurring after
12/31/13, UI will accept an application from an employer up to 90 days after its due date if the transferee satisfies UI that its application was late as a result of excusable neglect.
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E. Effects of Taking Over a UI Account
- The former owners/operators (positive or
negative) UI account balance is transferred to the new owner/operator;
- The former owners/operators tax rate(s) and
rate factors are transferred to the new owner/operator;
- The former owner/operators reported payroll for
meeting the taxable wage base in the transfer year is transferred to the new
- Any future benefits based on employment with the former
owner/operator are charged to the new owner/operator; and
- Both the former owner/operator and new owner/operator are
responsible for any outstanding tax liability of the former owner/operator.
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F. UI Tax Rates If You Take
Over An Account
- A new owner/operator who takes over the UI account of the
former owner/operator and is not already an employer under UI law, is assigned the tax
rate and tax rate factors of the former owner/operator;
- A new owner/operator who is not already an employer under
the UI law and who takes over two or more UI accounts at the same time, is assigned a tax
rate based on the combined tax rate factors of each of the former owners/operators; and
- A new owner/operator who is already an employer under the
UI law keeps the UI tax rate of its original business for the quarter in which the transfer
took place. Beginning with the calendar year following the year in which the transfer occurred, the tax rate will be based on the combined rate factors of
both employers. This may require the assignment of a new UI
account number for the combined business.
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G. Becoming a Newly Covered Employer Without Taking Over the UI Account of the Former Owner/Operator
If you are a new owner/operator of a business but are not
taking over the UI account of the former owner/operator, and are not already an
employer under the UI law, you become an employer under the Wisconsin UI law as of the
date of the transfer.
As a newly covered employer, you will have all other aspects of a
new UI employer including:
- The tax rate for new employers for the first three years.
- The first UI tax report deadline, which is:
The deadline of the quarter following the quarter in which
the employer became covered; or
January 31, for those employers who became covered in the
fourth quarter of the year.
To obtain more information on business transfers and taking over
the UI account of the former owner/operator, contact us at:
- Telephone: (608) 261-6700
Deaf, hearing or speech-impaired callers may reach us
through WI TRS.
Updated: November 12, 2013
Content Contact: UI Tax