What is a corporate spin-off?

A corporate spin-off is a form of corporate restructuring that creates two or more independent companies from a formerly larger company. The parent company, referred to as the ‘spinner’, spins off some of its assets and liabilities into a separate company, which is typically publicly traded. The goal of a corporate spin-off is to increase shareholder value by unlocking the hidden value in a business without having to go through a joint-venture or merger. In New Hampshire, a corporate spin-off is governed by the same corporate laws and statutes that regulate all corporate entities in the state. Those regulations govern the parties involved, the process itself, any disclosures, and how the spin-off will be structured. At its heart, a corporate spin-off is a way to create two separate businesses without going through any legal proceedings. It’s a way for a company to divest itself of certain assets in order to focus on what it does best, while creating a new business entity that can focus on capitalizing on those assets. In order for a corporate spin-off to be successful, it must be well planned. It must also have the right legal structure in place in order to make sure that the spin-off is properly executed and not challenged in the courts. The process of spinning off a business should be done in consultation with qualified legal and financial advisors who can advise on the relevant laws and help the parties involved to develop the most efficient and effective spin-off structure.

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What is a corporate spin-off?

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