You Can Spin It Off Or Split It Up, But Keep It Active

Farrell Fritz, P.C.
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A couple of months back, a local business reporter asked whether I could identify one kind of corporate transaction that was occupying more of my time than any other. When I asked whether they were referring to any specific industry, form of M&A transaction,[i] or type of buyer,[ii] they replied that they were not necessarily thinking about the purchase and sale of a business – they were just curious whether I was seeing businesses engaging in one type of strategic transaction more any other.

“Business separations,” I immediately replied, “I’ve been working on a greater number of business separations, generally, and of corporate separations, in particular, than at any other time.”[iii]

After a brief description of “spin-off” transactions, and of the conditions that must be satisfied in order for such a transaction to enjoy “tax-free” treatment,[iv] the reporter wondered whether many closely held businesses find it difficult to satisfy the “active business” test.[v]

Some do encounter difficulties, I agreed, while others foresee them before embarking on the division of the corporation and plan accordingly.

That being said, there are still other owners and advisers who are unaware of the various accommodations the IRS has made over the years that facilitate the satisfaction of the active business requirement by recognizing certain business realities.

Before describing a recent IRS private letter ruling that illustrated the application of one such accommodation, let’s quickly review the operation of the Code’s spin-off rules, followed by a description of some of the ways by which the IRS has made it a bit easier to meet the ATB test.

Corporate Divisions – In Brief

Generally, if a corporation distributes property with respect to its stock to a shareholder, the Code provides that the amount of the distribution is equal to the amount of money plus the fair market value of other property received. This amount is treated as (1) the receipt by the shareholder of a dividend to the extent of the corporation’s earnings and profits, (2) the recovery of the shareholder’s basis in the stock, and/or (3) gain from the sale or exchange of property.[vi] The corporation recognizes gain to the extent the fair market value of the property distributed exceeds the corporation’s adjusted basis in the property.[vii]

“Spin-Offs”

However, the Code also provides that, under certain circumstances, a corporation (Distributing) may distribute stock in a corporation it “controls” (Controlled)[viii] to its shareholders without causing either Distributing or its shareholders to recognize income, gain, or loss on the distribution.[ix]

Distributions of the stock of Controlled generally take three different forms: (1) a pro rata distribution to Distributing’s shareholders of the Controlled stock (a “spin-off”), (2) a distribution of the Controlled stock in redemption of Distributing stock (a “split-off”), or (3) a liquidating distribution in which Distributing distributes the stock of more than one Controlled, either pro rata or non-pro rata among its shareholders (in either case, a “split-up”).

Non-recognition treatment applies to a distribution of Controlled that effects only a readjustment of the continuing interests of Distributing’s shareholders in the property of Distributing and Controlled. In this regard, one or more persons who, directly or indirectly, were the owners of the enterprise prior to the distribution or exchange own, in the aggregate, an amount of stock establishing a continuity of interest in each of the modified corporate forms in which the enterprise is conducted after the separation.[x]

Business Purpose

In order to secure this favorable tax treatment, the transaction must meet various requirements. For example, the transaction must be carried out for one or more corporate business purposes. A transaction is carried out for a corporate business purpose if it is motivated, in whole or substantial part, by one or more corporate business purposes.[xi]

A corporate business purpose is a real and substantial purpose that is germane to the business of Distributing or of Controlled. A shareholder purpose is not a corporate business purpose.[xii] Depending upon the facts of a particular case, however, a shareholder purpose for a transaction may be so nearly coextensive with a corporate business purpose as to preclude any distinction between them. In such a case, the transaction is carried out for one or more corporate business purposes.

The distribution that consummates the separation of the two corporations must itself be carried out for one or more corporate business purposes.[xiii]

Device

Among the other requirements that must be satisfied in order for a distribution of Controlled to be “tax-free” to Distributing and its shareholders are two that are intended to prevent a distribution from being used inappropriately to avoid shareholder-level tax on dividend income; specifically, the transaction must not be used principally as a device for the distribution of the earnings and profits of Distributing or Controlled or both (a device),[xiv] and both Distributing and Controlled are required to be engaged, immediately after the distribution, in the “active conduct of a trade or business” (ATB).

An active business is one that has been actively conducted throughout the five-year period ending on the date of the distribution, and must not have been acquired within that period in a transaction in which gain or loss was recognized unless the acquisition constituted an expansion of the original, otherwise qualifying business.[xv]

Which brings us back to the ATB.

Conducting an Active Trade or Business

As indicated above, the distribution of Controlled qualifies for non-recognition treatment only if Distributing and Controlled are each engaged in the active conduct of a trade or business immediately after the distribution.[xvi]

The Code provides rules for determining whether a corporation is treated as engaged in the active conduct of a trade or business for purposes of this rule. Thus, a corporation is treated as engaged in the active conduct of a trade or business if it is itself engaged in the active conduct of a trade or business, or if substantially all of its assets consist of the stock of a corporation or corporations controlled by it (immediately after the distribution), each of which is engaged in the active conduct of a trade or business.[xvii]

According to IRS regulations, a corporation shall be treated as engaged in the active conduct of a trade or business immediately after the distribution if a specific group of activities are being carried on by the corporation for the purpose of earning income or profit, and the activities included in such group include every operation that forms a part of, or a step in, the process of earning income or profit. Such a group of activities ordinarily must include the collection of income and the payment of expenses.[xviii]

The determination whether a trade or business is actively conducted will be made from all of the facts and circumstances. Generally, the corporation is required itself – through its own employees – to perform active and substantial management and operational functions; the activities performed by persons outside the corporation, including independent contractors, are not counted toward the satisfaction of this test. That being said, the fact that the corporation also uses independent contractors will not prevent it from satisfying this requirement.[xix]

TIPRA

In 2005, the Code was amended[xx] to provide that the ATB test should be determined by reference to the relevant affiliated group of corporations. In the case of the distributing corporation, the group consists of Distributing as the common parent and all corporations affiliated with Distributing; the relevant affiliated group for the controlled corporation is determined in a similar manner, with Controlled as the common parent.[xxi]

Thus, for purposes of the ATB test, the activities performed by a corporation will include not only the activities of its employees, but also the activities performed by employees of an affiliate of the corporation.[xxii]

According to proposed regulations, the activities performed by shareholders of a closely held corporation will also be taken into account if they are performed for the corporation.[xxiii]

Revenue Rulings

Over the years, the IRS has issued a number of revenue rulings to which taxpayers may look for guidance in determining whether they may satisfy various aspects of the ATB test.

For example, the IRS found that a controlled corporation was engaged in an ATB where it had only two employees – a handyman and the sole shareholder of the distributing corporation – who performed substantial management and operational functions apart from the activities performed by the independent contractors.[xxiv]

In another ruling,[xxv] the IRS held that the controlled corporation was not engaged in an ATB where its two officers – the two shareholders of the distributing corporation – engaged in some managerial and operational activity but not enough to “qualitatively distinguish its operations from mere investments.”

Similarly, the IRS determined that a controlled corporation failed to satisfy the ATB test where the corporation had hired an unrelated management company to conduct the day-to-day operations of its business, while its own officers failed to demonstrate the performance of any substantial operational and managerial activities.[xxvi]

In a very instructive ruling,[xxvii] the IRS considered two corporations that were owned by a holding company. The first corporation had employees and was engaged in an ATB. The second corporation shared three officers with the first corporation, but had no paid employees of its own; rather, all of its operational activities were performed by the employees of the first corporation, under the control, supervision and direction of the second corporation’s officers. The first corporation paid its employees for these services and was reimbursed by the second corporation. The second corporation did not compensate its officers, but it reimbursed the first corporation for the amount of their time devoted to the management and supervision of the second corporation’s affairs.

Immediately following the holding company’s distribution of the second corporation, the latter employed, on a full time basis, most of those employees of the first corporation who had worked on its behalf prior to the distribution.

The IRS ruled that the second corporation met the ATB test notwithstanding the fact that, during the five-year period preceding distribution of its stock, it had no employees other than its officers.

Partnerships

The fact that a partnership engages in activities that would constitute the active conduct of a trade or business if conducted directly by a corporate partner does not necessarily mean that each partner in the partnership is considered to be engaged in the active conduct of a trade or business for purposes of the ATB test. In such a case, the determination of whether a partner is considered to be engaged in the active conduct of a trade or business must be based on the requirements of the spin-off rules, taking into account the activities of the partner (if any), the partner’s interest in the partnership, and the activities of the partnership.

A few years back, the IRS considered the case of a partnership in which all management and operational functions of an active business were performed by the partnership’s own employees. A corporation owned a 33.3% interest in the partnership, but performed no services with respect to the partnership’s business. The IRS ruled that the corporation was engaged in the active conduct of the partnership’s business for purposes of the ATB test because it owned a “significant” interest in the partnership and the partnership performed the required activities that constituted an active trade or business.[xxviii]

However, the IRS also ruled that if the corporation had instead owned a 20% interest in the partnership, it would not be engaged in the active conduct of the partnership’s business for purposes of the ATB test because the corporation neither owned a significant interest in the partnership nor performed active and substantial management functions for the partnership.[xxix]

During the same year that the above ruling was issued, the IRS proposed regulations under the spin-off rules that addressed the application of the ATB test where a distributing or controlled corporation was a member of a partnership. According to the proposed regulations, for purposes of the ATB test, a corporate partner in a partnership will be attributed the trade or business assets and activities of that partnership during the period that such partner satisfies the following requirements:

i. the corporate partner (or its affiliates) directly (or indirectly through one or more other partnerships) owns a significant interest (i.e., at least 33.3%) in the partnership; or

ii. the corporate partner (or affiliates of the partner) perform active and substantial management functions for the partnership with respect to the partnership’s trade or business assets and activities,[xxx] and the partner (or its affiliates) directly (or indirectly through one or more other partnerships) owns a meaningful interest (i.e., at least 20%) in the partnership. Whether such active and substantial management functions are performed with respect to the trade or business assets and activities of the partnership will be determined from all of the facts and circumstances.

The activities of independent contractors, and of partners that are not affiliates of the corporate partner, are not taken into account for these purposes.[xxxi]

PLR 201949012

Which brings us to the letter ruling to which I referred earlier.

Distributing Corp. was owned equally by Shareholder 1, Shareholder 2, and Shareholder 3 (the “Shareholders”). Distributing was directly engaged in Business A.

The Shareholders and Employee, as employees of Distributing, performed Services for Business A. Other Individuals, who were not employees of Distributing, performed Y Services and the majority of Z Services for Business A.

For what were represented to be valid corporate business purposes, Distributing proposed the following transaction:

  1. Distributing would form Controlled 1 and Controlled 2 Corps.
  1. Distributing would (a) contribute a portion of the assets of Business A to Controlled 1 in exchange for all of the stock of Controlled 1 and the assumption by Controlled 1 of a portion of Distributing’s liabilities (“Contribution 1”), and (b) a portion of the assets of Business A to Controlled 2 in exchange for all of the stock of Controlled 2 and the assumption by Controlled 2 of a portion of Distributing’s liabilities (“Contribution 2”).[xxxii]
  1. Distributing would distribute (a) all of the stock of Controlled 1 to Shareholder 1 in exchange for all of Shareholder 1’s stock in Distributing (“Distribution 1”), and (b) all of the stock of Controlled 2 to Shareholder 2 in exchange for all of Shareholder 2’s stock in Distributing (“Distribution 2, and together with Distribution 1, the “Distributions”) – basically, a split-up.[xxxiii]

Following the Distributions, Shareholder 3 and Employee would perform X Services for the portion of Business A remaining in Distributing; Shareholder 1 and Employee would perform X Services for the portion of Business A contributed to Controlled 1; and Shareholder 2 and Employee would perform X Services for the portion of Business A contributed to Controlled 2.

Distributing represented that, following the Distributions, Distributing, Controlled 1, and Controlled 2 each would continue, independently and with its separate employees, the active conduct of its share of all the integrated activities of the business on which it relied to meet the ATB requirement,[xxxiv] as conducted by Distributing prior to consummation of the transaction, except that Distributing, Controlled 1, and Controlled 2 would share the services of Employee. Distributing, Controlled 1, and Controlled 2 each would pay Employee directly for the value of Employee’s services.

Distributing also represented that (1) Contribution 1 and Distribution 1 would qualify as a transaction in which no gain or loss was recognized to Distributing, Controlled 1, or Distributing’s shareholders, and (2) Contribution 2 and Distribution 2 would qualify as a transaction in which no gain or loss was recognized to Distributing, Controlled 2, or Distributing’s shareholders.

Based on the foregoing facts and representations, the IRS ruled that Distributing, Controlled 1, and Controlled 2 each was engaged immediately after the Distributions in the active conduct of a trade or business within the meaning of the spin-off rules.

So What?

OK, the PLR did not involve an affiliate of either the distributing or controlled corporations. Nor did it involve a partnership in which either the distributing corporation or any of the controlled corporations was a member of a partnership.

However, it did involve the division of one corporation into three corporations, each of which, after the distribution, operated a vertical slice of the business previously operated entirely by the distributing corporation.

What’s more, each corporation had only one full-time employee – the individual who also happened to be such corporation’s sole shareholder. The three corporations shared a “second employee” – Employee – who performed services for each of them. In other words, it sounds like the Shareholders were lost without Employee, but the fact that they would have to share Employee wasn’t enough to keep the Shareholders together.[xxxv]

Nor, significantly, was it enough to prevent the IRS from accepting the premise that something less than two full-time employees would suffice for purposes of the distributing or controlled corporation’s satisfying the ATB requirement, at least under the circumstances presented.

This outcome reminded me of other rulings issued by the IRS over the years in which the proposed spin-off satisfied the ATB requirement notwithstanding that the corporations involved had few if any employees, and notwithstanding that they shared the services of a “related” party.

In one such ruling, for example,[xxxvi] Individuals A, B and C were officers and directors of Distributing. Distributing had no employees. The three individuals performed all managerial activities for Business A. Distributing utilized the employees of Partnership to perform certain operational activities for Business A. These employees performed these activities under the direction of Distributing. Distributing reimbursed Partnership for the cost of such services. Individuals A, B and C owned equally all the equity interests in Partnership.

It was represented that, following a split-off of Controlled to Individual C,[xxxvii] Distributing and Controlled each would continue the active conduct of its share of all the integrated activities of Business A conducted by Distributing prior to the split-off – indeed, Distributing and Controlled indicated that they may continue to utilize Partnership employees.[xxxviii]

In short, before a corporate client and its shareholders dismiss the possibility of a tax-free division on account of the absence of employees, it would behoove them to review IRS revenue rulings and private letter rulings similar to the ones discussed above. They may be surprised to find that the IRS has already considered their situation, or one similar to it, and has not found it wanting in terms of the ATB requirement.


[i] For example, a sale of stock or a sale of assets, and every permutation thereof.

[ii] A strategic buyer, who may, for example, be looking to enter a new geographic market or to eliminate a competitor and take its customer base, versus a private equity buyer that sees an opportunity to take a company to the next level before disposing of it in relatively short order for a profit that the buyer’s investors will find generous.

[iii] The reporter also asked to what I attributed the increased incidence of corporate separations.

There are several reasons, I explained. One major reason is the increased number of close, family-owned corporations that are being passed down by their founders to their children. These “children” don’t always see eye to eye, which often leads to serious disagreement within – and presents the potential for serious harm to – the business.

Such conflicts may be resolved through the sale of the business to a third party, or the buyout of a dissenting child. The first option is generally tax-inefficient for all the owners, while the second is tax-inefficient for the selling owner, and may be economically expensive for the buyer(s) who may have to borrow the funds necessary for the acquisition.

However, more and more owners who find themselves in these circumstances are turning to a source of information and ideas that was not available to their predecessors, which brings us to a second major reason for the increased spin-off activity among close corporations: the internet. The abundance of materials available on the internet have educated owners and advisers alike to options other than a taxable sale.

[iv] Tax-deferred, really.

[v] See below.

[vi] IRC Sec. 301. Of course, we are assuming that the distribution was not a redemption of a shareholder’s shares of stock in the corporation that qualified for exchange treatment under IRC Sec. 302.

[vii] IRC Sec. 311(b).

[viii] IRC Sec. 355(a)(1)(D). The controlled corporation may be a newly formed subsidiary to which Distributing has contributed the assets of an ATB: a “divisive D reorganization.” See IRC Sec. 368(a)(1)(D) and Sec. 355. If the controlled corporation is already in existence and has been engaged in an ATB, then Section 355 alone is invoked.

[ix] IRC Sec. 1032 accords tax-free treatment to Controlled for its issuance of stock to Distributing in exchange for money or other property.

[x] Reg. Sec. 1.355-2(c). See also Reg. Sec. 1.368-1(e). But note that the IRS has not applied to “divisive D reorganizations” the more lenient continuity of interest rules applicable to other reorganizations described in IRC Sec. 368(a).

[xi] Reg. Sec. 1.355-2(b). The principal reason for this business purpose requirement is to provide non-recognition treatment only to distributions that are incident to readjustments of corporate structures required by business exigencies and that effect only readjustments of continuing interests in property under modified corporate forms.

[xii] For example, the personal estate planning purposes of a shareholder.

[xiii] If a corporate business purpose can be achieved through a nontaxable transaction that does not involve the distribution of stock of a controlled corporation and which is neither impractical nor unduly expensive, then the separation is treated as not being carried out for that corporate business purpose.

[xiv] IRC Sec. 355(a)(1)(B). A tax-free distribution of the stock of a controlled corporation presents a potential for tax avoidance by facilitating the avoidance of the dividend provisions of the Code through the subsequent sale or exchange of stock of one corporation and the retention of the stock of another corporation. A device can include a transaction that effects a recovery of basis. Generally, the determination of whether a transaction was used principally as a device will be made from all of the facts and circumstances.

[xv] IRC Sec. 355(a)(1)(C) and Sec. 355(b); Reg. Sec. 1.355-3(b)(3)(ii).

[xvi] IRC Sec. 355(b)(1)(A).

[xvii] IRC Sec. 355(b)(1)(B).

[xviii] Reg. Sec. 1.355-3(b)(2). https://www.taxlawforchb.com/2019/07/corporate-spin-offs-the-active-trade-or-business-and-the-collection-of-income/

[xix] Reg. Sec. 1.355-3(b)(2)(iii).

[xx] Tax Increase Prevention and Reconciliation Act of 2005, P.L. 109-222.

The change was made in order to simplify spin-off planning for corporate groups that use a holding company structure. Prior to the change, such groups often had to undergo elaborate restructurings so as to place active businesses in the proper entities for purposes of the 5-year active business test.

[xxi] IRC Sec. 355(b)(3). Affiliation is determined by reference to IRC Sec. 1504(a); basically, a chain of corporations connected through stock ownership with a common parent. At least 80% of the total voting power and total value of a corporation is required.

[xxii] A member of its affiliated group.

[xxiii] Prop. Reg. Sec. 1.355-3(b)(2)(iii).

[xxiv] Rev. Rul. 73-234.

[xxv] Rev. Rul. 86-126.

[xxvi] Rev. Rul. 86-125.

[xxvii] Rev. Rul. 79-394; amplified by Rev. Rul. 80-181.

[xxviii] Rev. Rul. 2007-42.

[xxix] It is not clear whether a 20% partnership interest represents a floor above which no partner services are required in order for the partner to satisfy the ATB test.

[xxx] For example, makes decisions regarding significant business issues of the partnership and regularly participates in the overall supervision, direction, and control of the employees performing the operational functions for the partnership.

[xxxi] A corporation will not be treated as engaged in the active conduct of a trade or business unless it (or its affiliates, or a partnership from which the trade or business assets and activities are attributed) is the principal owner of the goodwill and significant assets of the trade or business for Federal income tax purposes.

[xxxii] Immediately after Contribution 1 and Contribution 2, Distributing (not including the value of the stock of Controlled 1 and Controlled 2), Controlled 1, and Controlled 2 each had a fair market value (assets less its assumed liabilities) that was equal to one-third of Distributing’s fair market value immediately prior to Contribution 1 and Contribution 2.

[xxxiii] Each of the three shareholders ended up with a wholly-owned corporation: the original distributing corporation and the two newly-formed controlled corporations.

[xxxiv] A “vertical” division. It appears that the only post-distribution connection among the corporations was Employee.

[xxxv] Query what the business purpose for the split-up was? Fit and focus seems like a possibility. Perhaps irreconcilable differences among the shareholders, with adverse effects to the business.

[xxxvi] PLR 201426007.

[xxxvii] The distribution of Controlled by Distributing to C in complete redemption of C’s shares in Distributing. The parties represented that the distribution of Controlled was being carried out for the corporate business purpose of fit and focus, in particular to resolve shareholder disputes.

[xxxviii] They indicated, alternatively that they may hire their own employees, or the officers of Distributing and Controlled (the Individuals) may directly conduct the activities.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.