Eve 1k Questions 6 Answers 2 Best Answers 140 Points View Profile EveBeginner Asked: November 21, 20202020-11-21T09:11:14+05:30 2020-11-21T09:11:14+05:30In: Business What is the Difference Between Spin-off and Split-off? Hi, What is the Difference Between Spin-off and Split-off? Spin-off vs Split-off? What is a Split off? Is a Spinoff a divestiture? Share Facebook Related Questions What is the Difference Between Publicity and Public Relations? What is the Difference Between Audit and Review? 1 Answer Voted Recent CrazyMan 17 Questions 1k Answers 1k Best Answers 53k Points View Profile Best Answer CrazyMan Guru 2020-11-21T09:13:27+05:30Added an answer on November 21, 2020 at 9:13 am Difference Between Spin-off and Split-off It is a common trend in companies and industries where the parent company separates and forms a new sister company or sells part of the shares to another company. In this process, a separate company is formed, functioning as a subsidiary of the parent company or a completely separate company. It is done through the process of a divestiture or, in common terms called as disinvestment. This process of disinvestment is done through – spin-off, split-off, split-up, carve-out, or a sale of a subsidiary. Here I will explain the terms Spin-off and Split-off, so continue reading to find out the differences between them. A spin-off is the disinvestment process where a part of the business got separated from the parent company and formed into a separate company or firm. The new shares are issued for the newly formed company, and sometimes this type of disinvestment is also known as a starburst. The company’s ownership is not changed as shares are distributed in the form of dividends to all shareholders. Shareholders can either sell their holdings in the market or retain these shares with themselves. The spin-off is usually done after identifying the long term potential of that particular division. Parent company transfers its assets and intellectual property, workforce, etc., to the newly formed enterprise. A split-off is also similar to a spin-off but has got some profound differences. Split-off can be defined as restructuring the existing corporate structure, where a business’s unit stock or a subsidiary is transferred to the parent company’s shareholders. In split-off, the parent company offers the existing shareholders to exchange their shares for a new company or subsidiary. Split-off is usually done to safeguard the subsidiary company against illegal takeovers and also benefits the parent as well as its subsidiary. Spin-off Vs. Split-off A spin-off is the disinvestment process where the new company is formed with a separate identity. At the same time, split-off is the restructuring strategy where the parent company has its own stakes over the new company. A spin-off distributes shares to the new shareholders, while in a split-off, there is an option to choose between parent company and subsidiary. Spin-offs tend to perform better than split-offs and sometimes better than their parent company. Disinvestment is widespread in the corporate world, and the firms which are not doing well are sold off through the process of disinvestment. This is the main difference between Spin-off and Split off. 1 Share Share Share on Facebook Share on Twitter Share on WhatsApp Share on LinkedIn You must login to add an answer.Continue with FacebookContinue with GoogleContinue with Twitteror use Username or email* Password* Captcha* Remember Me! Forgot Password?