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What is the meaning of Amalgamation and Absorption of a company?
Can anybody let me brief what is the meaning of:
a.Amalgamation of Co.
b. Absorption of Co.
What is the difference between these two?
Thanks in advance for your reply.
1 Answer
- CalaLv 79 years agoFavorite Answer
Amalgamation is when 2 or more separate business get together and merge their companies in order to for a new and stronger company. ie Company A and company B consolidate their businesses and form company C. An amalgamated company changes it's name and forms a totally new company.
Absorption of a company is the process of one existing company taking over another (or more than one) existing company. ie company A is a large company selling plumbing and roofing equipment. Company B sells the same product but on a far smaller scale. So company A buys company B. Company B ceases trading under it's own name and becomes part of company A. So company A has carried out the Absorption of company B.
Source(s): Company Secretary