Spin-Off

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Spin-Off

The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders.

When a spin-off occurs, the shareholders of the parent corporation are not required to surrender any of their parent corporation stock in exchange for the subsidiary's stock.

In the event that the distribution of stock to the parent corporation's shareholders amounts to a dividend, the distribution can be taxed pursuant to provisions of Income Tax statutes.

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He promised last year that up to 20 percent of Blockbuster would be sold in the first half of 1999 with the rest spun off to shareholders during this year's fourth quarter.
corporations have spun off foreign subsidiaries (Fortune Brands' spin-off of Gallaher is a notable exception), realigning multinational corporate structures has many benefits.
In their new roles, Chaden will concentrate on preparing the enterprise to be spun off as an independent, publicly traded company, including recruiting a board of directors to govern Hanesbrands Inc.