Equity ownership changes in spin-offs, but it does not change in split-ups.

Question

Quizplus · Accepted Answer

In a spin-off, a parent company distributes shares of a subsidiary to its shareholders, maintaining the proportional equity ownership in both companies. In a split-up, the parent company is divided into two or more independent companies, and the original equity ownership is redistributed among these new entities, effectively changing the equity ownership structure.

Equity Ownership Changes in Spin-Offs, but It Does Not Change