Changes in Business

This page has information for entities that sell all or part of their business, stop employing workers for any reason, or no longer meet the liability requirements for unemployment insurance tax. 

Selling Your Business

An employer should inform the Division of Employment Security (DES) when a change in ownership of business occurs by completing the Employer Change Request. The information also may be provided online through UInteract.

A business may change ownership due to a sale, lease, reorganization, merger, foreclosure, or inheritance. A change of ownership also may occur when the business makes a change in legal status such as when a partnership adds or changes a partner; an owner forms a corporation; or an entity changes its state of registration. The new owner or entity needs to complete the Unemployment Tax Registration form and return it to the address listed on the form. The new owner may also provide the information online through UInteract.


An employer needs to notify the Division in writing when it acquires all or part of another business entity.  This notification needs to be submitted to the Division within 30 days from the date of the acquisition. The information may also be provided by the employer online using UInteract.

When there is a change in the legal entity operating a business or a business is acquired and continued by another party, a transfer of the employer's unemployment tax account may occur. This process is referred to as successorship.

The parties involved in a transfer are referred to as:

  • Predecessor (previous operating entity) is the seller or prior operator whose organization, trade, or business has been acquired by another entity.
  • Successor (new operating entity) is the subsequent owner or operator that has acquired and continued the organization, trade, or business of another entity.

An employer’s unemployment experience is transferred to one or more successors who, at the same time, acquire, and continue without interruption substantially all the business of a predecessor. In addition, if an employer transfers its trade or business, or a portion thereof, to another employer and at the time of the transfer there is substantially common ownership, management, or control of the employers, then the unemployment experience attributable to the transferred trade or business shall be transferred to the employer (successor) to whom such business is so transferred.

Substantially common ownership, management, or control is defined in the Code of State Regulations, 8 CSR 10-4.190.

The successor employer will stand in the position of their predecessor in all respects, including the predecessor's separate account, contributions, benefit charges, annual payrolls, and liability for current or delinquent contributions, interest and penalties.

Ownership Determinations

  • If the new operating entity is determined to be a successor:

The predecessor’s experience rating account, or percent attributable to the portion acquired, is transferred to the successor.

A successor that receives account experience from a predecessor shall stand in the position of the predecessor employer in all respects. This includes the predecessor's actual contribution and benefit experience, annual payrolls and liability for current or delinquent taxes, interest and penalties, and contribution rate attributable to the percentage of business acquired.

In the event that any successor was an employer prior to an acquisition, the DES shall make a recalculation of the contribution rate for any successor employer on the date of the acquisition if the date of acquisition is on the first day of a calendar quarter; or on the first day of the next calendar quarter if the acquisition date is other than the first day of a calendar quarter. The successor employer shall use its rate (before recalculation) for the calendar quarter in which the acquisition was made when the date of acquisition is other than the first day of a calendar quarter.

  • If the DES determines the new operating entity is not a successor:

The predecessor entity keeps its entire experience rating. The new entity starts with a new employer account (unless it already had an account). The new entity is responsible for taxes and benefit charges on the wages earned by employees after the date of change. Taxes and benefit charges on any wages earned by employees prior to the date of change are the responsibility of the previous entity.

Prohibited Transfer

Missouri Employment Security Law prohibits the transfer of unemployment experience ratings whenever any individual, type of organization or employing unit is not an employer at the time it acquires the trade or business of an employer and the DES determines that such new entity acquired the business solely or primarily for the purpose of obtaining a lower rate of contributions. Instead, the new entity will be assigned a new employer account and rate. To determine if the acquisition was made solely or primarily to obtain a lower rate, the DES will use objective factors such as:

  • The cost of acquiring the business
  • Whether the new entity continued the business enterprise of the acquired business
  • How long such business enterprise was continued
  • Whether a substantial number of new employees were hired for performance of duties unrelated to the business activity conducted prior to acquisition.

Note: Such practices as shifting payroll from an account with a higher rate to an account with a lower rate and various restructuring schemes to obtain beginning or lower tax rates are referred to as State Unemployment Tax Act (SUTA) dumping, and are illegal. Learn more.

Discontinuing Employment - Entity No Longer Employs Workers

An employer that ceases to have employment without a successor to its business may be exempted from filing reports beginning with the first day of the calendar quarter following the last date it paid any wages, provided it files an application for such exemption. The application must show the reason the employer discontinued having employment and that no employment is anticipated in the foreseeable future. A request for exemption from filing reports may be made by completing an Employer Change Request. The application also may be submitted online using UInteract.

An employer that is exempted from filing reports continues to be liable for reporting any wages it may later pay for employment subject to the Missouri Employment Security Law until or unless it terminates its liability. An employer must notify the DES if it resumes employment after being exempted from filing reports.

Termination of Coverage - Entity No Longer Meets Liability for Unemployment Tax

An employer may file an application for Termination of Coverage as of January 1st of any calendar year. The application must be filed by February 10th of such year and must show that the employer and any predecessor combined had less employment and wages during the preceding calendar year than was necessary to become liable under the law and was not liable for federal unemployment tax. Criteria for terminating coverage as to wages and employment of the various types of employers during the preceding calendar year are as follows:

General Business Employer
Did not pay $1,500 or more total wages during any calendar quarter, had less than 20 weeks in which it employed a worker, and was not liable for federal unemployment tax

Employer of Domestic Worker
Did not pay $1,000 or more cash wages during any calendar quarter and was not liable for federal unemployment tax

Agricultural Employer
Did not pay $20,000 or more cash wages during any calendar quarter in all states combined, had less than 20 different weeks in which 10 or more workers were employed and was not liable for federal unemployment tax

Nonprofit Organization
501(c)(3)-exempt: Did not employ four or more workers in 20 weeks

Governmental Entity or Federally Recognized Indian Tribes
Did not pay any wages.

In addition, any employer not having knowledge of liability for prior years may file an application to terminate coverage beginning any January 1st following first year of liability if the employer files such application within 90 days from the date of receiving a Notice of Liability, and employment or wages during any preceding calendar year met the criteria set out above.