Types of spin-offs & corporate separations

“Spin-off” is an umbrella for several distinct corporate separations — each structured, taxed, and filed differently. This is the field guide: what each one is, what shareholders actually receive, how it's taxed, and the SEC filing that identifies it. Sourced from the Wachtell Spin-Off Guide, IRC §355, and SEC filings — verified, not estimated.

The anchor: how a real spin-off is filed

A pure pro-rata spin-off is not a securities offering — it is not registered under the Securities Act of 1933 and has no S-1. The new company registers under the Exchange Act on Form 10 (EDGAR type 10-12B). To be tax-free under IRC §355, the parent must distribute control — defined as ≥80% of voting power plus ≥80% of each non-voting class (not 50%) — and pass the active-business, business-purpose and device tests. Every other variant below is a deliberate deviation from this anchor, and each deviation leaves a different filing fingerprint.

Full pro-rata separations

The parent hands new-company shares to all its shareholders at once — no choice, no cash.

Classic spin-off

Tracked & labeled

The parent distributes 100% of a subsidiary's shares to its own shareholders as a pro-rata dividend, creating a fully independent public company in one step.

Holders receive: New subsidiary shares, pro rata. No cash, no election.
Tax: Tax-free under IRC §355 if the parent distributes control (≥80% of vote + ≥80% of each non-voting class) and the active-business, business-purpose and device tests are met.
How we identify it: The subsidiary files Form 10 (EDGAR 10-12B) — registered under the Exchange Act only. Crucially, there is NO S-1: a pure spin-off is not a securities offering.
Example: GE → GE Vernova (2024); GE → GE HealthCare (2023).

Partial / majority spin-off

Classification planned

The parent distributes some — but not all — of the subsidiary, keeping a minority (or temporary majority) stake it must dispose of within five years to stay tax-free.

Holders receive: Pro-rata subsidiary shares; the parent retains a block.
Tax: Tax-free if ≥80% control is still distributed and the retained shares are disposed of within the §355 window.
How we identify it: Form 10 like a classic spin, but the information statement / 8-K discloses a parent retained-ownership %.
Example: Often paired with a later debt-for-equity exchange to monetize the retained stake.

Reverse spin-off

Tracked & labeled

A naming convention, not a separate structure: the spun-off business is larger than the parent left behind. Tax-mechanically still a classic §355 spin.

Holders receive: Same as a classic spin.
Tax: Same as a classic spin (§355).
How we identify it: Identical filing footprint to a classic spin; which side is the 'accounting successor' is an accounting designation, not a form type.
Example: HP split into HP Inc. (smaller) and Hewlett Packard Enterprise (larger), 2015.

IPO-based separations

The parent sells a piece of a subsidiary to the public for cash, instead of giving it away.

Equity carve-out (subsidiary IPO)

Captured (not yet labeled)

The parent floats a minority of a subsidiary in an IPO for cash, usually keeping majority control. Existing parent holders get nothing free — the public buys in.

Holders receive: Nothing automatically; the public buys IPO shares. Cash goes to the parent/subsidiary.
Tax: Taxable to the seller on the sold stake — it is a sale, not a §355 distribution.
How we identify it: The subsidiary files an S-1 ('offering', 'underwriters', 'use of proceeds') + Form 8-A. The presence of an S-1 is exactly what separates a carve-out from a classic spin.
Example: Ferrari carved out of Fiat Chrysler (2015) before the full spin (2016).

Two-step (carve-out → spin or split)

Classification planned

A carve-out IPO first (to establish a trading price and investor base), then months later the parent distributes or exchanges its remaining stake.

Holders receive: Step 1: the public buys. Step 2: existing holders get the rest (pro rata = spin; via exchange = split-off).
Tax: Step 1 taxable; step 2 tax-free if §355 is met.
How we identify it: An S-1, then a later Form 10 or SC TO-I from the same entity within a multi-month window.
Example: GE: Synchrony IPO (2014, SYF) then split-off (2015). BMY: Mead Johnson IPO (2009) then split-off.

Exchange-based separations

Shareholders choose to swap parent shares for the new company — or the parent dissolves entirely.

Split-off (exchange offer)

Classification planned

The parent offers holders the chance to exchange their parent shares for subsidiary shares — like a buyback paid in stock. It is elective and non-pro-rata, so ownership becomes disproportionate.

Holders receive: Subsidiary shares only if you tender parent shares (often at a small premium).
Tax: Tax-free to participants if §355 is met.
How we identify it: A dual signature: the parent files Schedule SC TO-I (issuer tender offer) AND registers the offered stock on Form S-4 / Form 425. The SC TO-I is the clean machine signal.
Example: GE → Synchrony (2015); Bristol-Myers Squibb → Mead Johnson (2009).

Split-up

Classification planned

The parent distributes all of its businesses into two or more separate companies and then ceases to exist. Distinguished from a split-off by the parent NOT surviving.

Holders receive: Shares in multiple successor companies; the original parent is liquidated.
Tax: Tax-free if §355 is met for each distribution.
How we identify it: Two or more Form 10s spun from one parent in a tight window, plus the parent filing Form 15 (deregistration) and/or Form 25 (delisting) and going dark.
Example: The 1984 break-up of AT&T into the regional 'Baby Bells' is the classic case.

Tax-driven combinations (spin + merge)

A separation used to sell a business to a third party without triggering corporate tax.

Reverse Morris Trust (RMT)

Classification planned

The parent spins off a business into a new public company that immediately merges with a third party — structured so the original parent's shareholders end up owning a majority of the combined company.

Holders receive: Subsidiary shares that convert into >50% of the merged company.
Tax: Tax-free to the parent if §355 is met AND the original holders own ≥50.1% of the combined entity (below that, §355(e) imposes corporate-level tax).
How we identify it: A Form 10 (or split-off) plus a near-simultaneous merger S-4 / Form 425 / DEFM14A by the spun company, with terms leaving original holders ≥50.1%.
Example: Jacobs Engineering → Amentum (2024). Verizon's wireline business → Frontier (2015).

Classic Morris Trust

Out of scope

The original 1966 structure: the parent spins off the business it wants to keep, then the parent itself merges with the buyer. Nearly extinct since 1997 — superseded by the RMT.

Holders receive: Subsidiary shares; the parent merges into the acquirer.
Tax: Tax-free if §355 + §368 conditions hold.
How we identify it: Effectively replaced by the RMT; too rare for a reliable rule.
Example: Named for the 1966 Morris Trust tax case.

Not a true spin-off (shown to distinguish)

Often confused with spin-offs, but mechanically different — included so you can tell them apart.

Tracking stock (letter / targeted stock)

Out of scope

A class of the PARENT's stock whose value tracks one division. No separate company is created — the assets stay inside the parent. Largely a 1990s phenomenon.

Holders receive: A new class of the parent's shares (often low/no vote), not shares of a separate company.
Tax: NOT a §355 event — no separate corporation is distributed. The IRS withdrew advance rulings in 1995; treatment is unsettled.
How we identify it: A charter amendment / new share class via S-1, S-3, 8-A or proxy — with no Form 10 and no new operating-company registrant. We do not track these.
Example: GM's 'Class E' (EDS) and 'Class H' (Hughes); AT&T Wireless tracking stock.

Squeeze-out / freeze-out merger

Out of scope

A controlling holder forces out the minority in a cash-out merger. This is a consolidation — the opposite of a separation — listed only to exclude it.

Holders receive: Cash (or stock) for the forced-out minority.
Tax: Taxable to cashed-out holders.
How we identify it: Schedule 13E-3 (going-private) + a merger proxy — a different filing family entirely. We track this under going-private, not spin-offs.
Example: —

Common misconceptions

A spin-off is not an IPO.A classic spin-off files a Form 10, never an S-1. If you see an S-1, it's a carve-out (a sale), not a spin.
§355 “control” is 80%, not 50%. The 50% figure is a different rule — §355(e), where a ≥50% acquisition within two years triggers corporate-level tax (the anti-Morris-Trust rule).
Split-off ≠ split-up. In a split-off the parent survives (an elective exchange offer). In a split-up the parent dissolves entirely.
Tracking stock is not a spin-off. No separate company is created and it is not a §355 transaction.
“Sponsored”, “conditional” and “litigation” spin-offs are labels on a classic Form 10 spin (a motive or a feature), not separate structures.

What we track today

Our spin-off calendar captures every Form 10 (10-12B) filing — the classic and reverse spins, and the spin leg of two-step and Morris-Trust deals. Carve-outs currently appear in our IPO calendar (they file an S-1). Distinctly labeling carve-outs, split-offs, split-ups and Reverse Morris Trusts is in progress. As always, every entry links to its source SEC filing — and where a structure can't be confirmed from a filing, we leave it blank rather than guess.

Sources

Wachtell, Lipton, Rosen & Katz — Spin-Off Guide (2025)
IRC §355, §368, §355(e); SEC Staff Legal Bulletin No. 4
Macabacus — spin-offs, equity carve-outs, Morris Trusts
SEC EDGAR filings (Form 10-12B, SC TO-I, S-4)

Educational reference, not tax or investment advice. Tax treatment depends on facts and the company's own filings (see Form 8937 for the issuer's reported treatment).