Business Expansion - Internal

Internal expansion for organizational structures can be visually depicted as a Parent in the top, Subsidiary on the bottom (all vertical), with the Stock Assets in between. With internal expansions, new entities are created which can include subsidiaries, joint ventures, special entities, and/or partnerships.

​Internal expansion is often used for special tax incentives, regulatory purposes, liability protection, the disposal of existing operations, and/or the establishment of clear lines of control (which will help ease the evaluation of financial and operating results). 

Common to internal expansion are spin-offs and split-offs. A spin off happen when ownership of a new created subsidiary is distributed to the parent, without the stockholders surrendering stock of the parent company. Where a split-off occurs when the subsidiary shares are exchanged for parent shares, which then reduces the outstanding shares of the parent.