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Type D divisive reorganizations can take the form of a split-up, a split-off, or a spinoff, whereby a corporation transfers part of its assets to one or more controlled corporations, which then distribute their stock in one of the following ways:
In a split-up, assets are transferred from one corporation to two or more controlled corporations. The stock of the controlled corporations is then distributed to the transferor corporation's shareholders, and the transferor corporation is liquidated. The distribution of the controlled corporations' stock can be made on a pro rata or non—pro rata basis.
In a split-off, certain assets of a corporation are transferred to a newly created corporation in exchange for all of the new corporation's stock. The transferor corporation then distributes the new corporation's stock to one (or one group of) shareholder(s), who are required to give up their stock in the transferor corporation in exchange.
In a spinoff, certain assets of a corporation are transferred to a newly created corporation in exchange for all of the new corporation's stock. The transferor corporation then distributes the new corporation's stock to its shareholders, who are not required to give up any part of their stock in the transferor corporation.
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