Understanding how to manage company spin-offs requires distinguishing between a full spin-off, a partial spin-off and a segregation. A full spin-off divides all assets into several companies and extinguishes the original company. Partial spin-off transfers an economic unit to another created or existing one, without extinguishing the original one. Segregation is similar to partial segregation but involves a more specific transfer of assets.
First the spin-off project is prepared: it identifies the companies involved, assets, liabilities, valuations, spin-off balance sheet, exchange fees and accounting effect date. It also defines special rights and examines how they fit into the tax neutrality regime. The existence of an «economic unit» is key to the partial spin-off.
2 Legal approval and tax neutrality
Once the project has been drafted, an independent expert’s report is required if a company is a public limited company. A shareholders’ meeting is then convened for approval. If approved unanimously, the resolution is published in the BORME or provincial newspaper.
It is then notarised and registered in the Mercantile Register. It is also communicated to employees and creditors who may be affected.
In order to qualify for the tax neutrality regime, it must have a valid economic rationale and comply with corporate income tax requirements. This regime does not allow latent income from tax-value differences to be included.
3 How company spin-off are managed, operational effects and monitoring
After registration, tax and labour formalities are carried out. The spun-off company is deregistered with the tax and social security authorities and the beneficiaries are deregistered and registered as appropriate.
The new balance sheets and accounting records must also be incorporated. The spin-off balance sheet may differ from the last approved balance sheet and include adjustments for real value. However, its contestation does not suspend the spin-off.
Operationally, it is essential to plan the transition. Confianz facilitates integration between separate units, defines governance structures, independent systems and technological supports. This ensures operational continuity and avoids duplication.
What we do at Confianz
- Strategic design of the spin-off project with identification of business units, valuations and operational objectives.
- Fiscal neutrality management, verifying economic purpose, avoiding tax risks and guaranteeing access to the FEAC regime.
- Legal and vocal coordination: expert reports, meetings, public deeds, registration and official announcements.
- Internal and external communication plan, informing employees, creditors and affected parties, managing expectations.
- Operational implementation, with separation of functions, technology and accounting appropriate for each new company.
- Post-decision monitoring, to verify tax and legal compliance, ensuring the effectiveness of the new business model.
At Confianz we design and execute each step, with a practical and human approach, facilitating a business transformation that brings stability and value. If you need to structure a spin-off, we can help you do it with confidence and vision. In our restructuring playlist you can find more information on this topic.