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Background: A spin-off company, also called just a spin-off or spin-out, is an operational strategy used by a company to create a new business entity from its parent company. It is a way of reorganizing a company’s administrative structure in order to improve its profitability. When a company plans to consolidate or streamline its workflow, it can sell a less productive division to form a new independent company. In other words, a company creates a new business entity out of its existing divisions, subsidiaries, or subunits. The new independent company is expected to be more profitable and worth more alone than it would be as a part of the larger business entity. The parent company may or may not choose to maintain a portion of ownership in the newly spun-off company. A split-off company, or a split-off, differs from a spin-off. It takes place mainly for accounting purposes, because the split-off is tax-free. However, it still has to meet the requirements set forth by the Securities and Exchange Commission (SEC). The shareholders of a split-off must relinquish their shares of stock in the parent company in order to receive shares of the subsidiary company. The split-off is a tax-efficient way for the parent company to redeem their shares of stock. A spin-off should not be confused with a split off. Tina: Have you heard that Expedia is going to spin off TripAdvisor as a public company in the third quarter in 2011? | 
