A split-up occurs when a parent corporation distributes the stock of two or more subsidiary corporations to its shareholders in exchange for all of their stock in the parent as part of a complete liquidation of the parent.

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A split-up, also known as a spin-off, involves distributing the stock of subsidiary corporations to shareholders in exchange for their parent company's stock. This results in the subsidiary corporations becoming independent entities with their own stockholders, while the parent company is completely liquidated.

A Split-Up Occurs When a Parent Corporation Distributes the Stock