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What you mean by amalgamation and absorption ?

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Question added by Zainul Abid , Office In Charge , Bin Sari Specialized Technologies W.L.L
Date Posted: 2014/08/21
Deleted user
by Deleted user

Both terms mean merger of two or more companies to form a company.

 

In Amalgamation all the existing companies ceasee to exist and a new company is formed. The newly formed company ows all assets and liabilites of the existing companies.

A Limited +  B Limited + C Limited =  ABC Limited (New Company)

 

In Absorption one of the companies being merged remains in business and absorbs other companies, other companies then cease to exist.

A Limited + B Limited + C Limitd = A Limited (One of the Existing Companies)

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Company Amalgamation: It is joining together and form a New company merging two companies and the new company reflects all/or main characteristics of both companies and the identity of the two merged companies still remain.

Company Absorption: It can be termed as "eating up" of the other company, and the characteristic of only one company remains to the public picture and the identity of the merged company is fully lost.

The answer and explanation of Mr.Muhammad Ahammed  is fully agreed

 

 

ali asgher
by ali asgher , Accounts Officer , Crete N Crete (Pvt) Ltd

The combination of one or more companies into a new entity. An amalgamation is distinct from a merger because neither of the combining companies survives as a legal entity. Rather, a completely new entity is formed to house the combined assets and liabilities of both companies. 

1.AccountingIntegration of an account (called absorption account) into related accounts in preparation of a financial statement.

 

 

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