Business Fragmentation and Its Economic Consequences for Companies and the Market

In modern conditions of development of small and medium-sized enterprises, one of the key problems is the optimization of the tax burden. In Russia, entrepreneurs often use the practice of splitting up businesses to maintain a preferential tax regime. Despite the economic benefits, such schemes carry the risk of tax audits, increased management costs, and reduced corporate transparency. The aim of the study is to examine the economic consequences of business fragmentation for companies and the market. The work uses scientific publications, analytical reviews and data on corporate restructurings. Methods of analysis, synthesis, comparative analysis of Russian and international practices, as well as content analysis of empirical data on company financial and structural indicators were used. The results demonstrate that Russian business fragmentation is primarily driven by fiscal motives, while foreign spin-off models (the spin-off of a subsidiary by distributing its shares among the shareholders of the parent company) are aimed at strategic management and capitalization growth. The practice of fragmentation in Russia allows for preferential treatment, but increases operational and managerial risks, complicates accounting, and may create unequal competition conditions. A comparative analysis revealed the need to combine economic efficiency and transparency of the corporate structure when planning restructurings. The study confirms the relevance of business fragmentation as a multidimensional phenomenon. The development of risk assessment methods, transparent management strategies and recommendations for optimizing the corporate structure will reduce negative consequences, increase the sustainability of companies and strengthen market competitiveness.