Secondary Business

AAA

DEFINITION of 'Secondary Business'

A part of a corporation that is not part of the corporation's core functions but supplements it instead. A secondary business can contribute to the overall health of the corporation and can hold assets just as any other business unit. It is most likely to be mentioned during the reorganization or distribution of a multibusiness corporation, and can be either part of the company making the acquisition or the target company.

INVESTOPEDIA EXPLAINS 'Secondary Business'

Even if a secondary business is spun off or sold, it may still continue to provide services for the corporation depending on the remaining investment. Examples of a secondary business are an automobile manufacturer's research and development (R&D) department or its consumer financing unit.

RELATED TERMS
  1. Divestiture

    The disposal of a business unit through sale, exchange, closure, ...
  2. Income Tax

    A tax that governments impose on financial income generated by ...
  3. Corporate Tax

    A levy placed on the profit of a firm, with different rates used ...
  4. Breakup Value

    The sum-of-parts value of a publicly traded company. This value ...
  5. Subsidiary

    A company whose voting stock is more than 50% controlled by another ...
  6. Spinoff

    The creation of an independent company through the sale or distribution ...
RELATED FAQS
  1. How can I set up an accrual accounting system for a small business?

    First, determine whether accrual accounting makes the most sense practically and financially. If the small business is also ... Read Full Answer >>
  2. What are the key differences between marketing and advertising?

    The key differences between marketing and advertising are based on how each term defines a separate function in the process ... Read Full Answer >>
  3. Is there a way to invest in the income effect?

    Investing in the income effect consists of investing in areas that are affected when an individual's income increases. The ... Read Full Answer >>
  4. What is the best form of equity financing for a start-up company?

    Raising capital during the startup phase of a business can present challenges to an entrepreneur. Debt financing is difficult ... Read Full Answer >>
  5. What effect does the income effect have on my business?

    The income effect may have positive or negative consequences on a small business, depending on many factors. The income effect ... Read Full Answer >>
  6. What is the best general ledger software for small businesses?

    General ledger software is available as both paid software and freeware. Some programs stand alone, while others require ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Cashing In On Corporate Restructuring

    Companies use M&As and spinoffs to boost profits - learn how you can do the same.
  2. Options & Futures

    Whom Should Corporations Please?

    Companies balance the interests of owners, customers and employees. Find out who comes out on top.
  3. Options & Futures

    Parents And Spinoffs: When To Buy And When To Sell

    Spinoffs can create great investing opportunities, but there's a time to stick around and a time to jump ship.
  4. Mutual Funds & ETFs

    Could Your Company Be A Target For Activist Investors?

    Find out why certain companies are targeted by these investors.
  5. Investing

    Use Breakup Value To Find Undervalued Companies

    Find out a company's worth if it were sold in pieces - it may be more than you think.
  6. Economics

    Explaining Cash On Delivery

    Cash on delivery, also referred to as COD, is a method of shipping goods to buyers who do not have credit terms with the seller.
  7. Entrepreneurship

    What is Unlimited Liability?

    Unlimited liability means that the owners of a business are liable for the entire amount of debt and obligations of that business.
  8. Economics

    What is a Partnership?

    A partnership is an organization where two or more owners operate a business.
  9. Economics

    What is a Spinoff?

    Businesses wishing to streamline their operations often sell less productive or unrelated subsidiary businesses as spinoffs.
  10. Entrepreneurship

    How To Expand Your Business Internationally

    A guide to the risks and rewards of expanding a business abroad.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center