Amlgamation is nothing but joining of two companies.one
company join to another company after they are making a new
company is called AMALGAMATION.
one company called ABC .
another company called BCD.
Now, ABC is running loss only and BCD also running loss so
these two companies agreed to Amalgamation after these two
companies are made a new company called ABCD.
when two or more companies come together to form a new
company and as result there is a winding up of such
companies and a new company came in to existence is called
There is a difference between Amalgamation and Absorption.
In the case of absorption only one company is winded up
i.e the transferee company and in case of amalgamation all
companies are winded up and a new company is formed.
Amalgamation may take place in two ways 1) Pooling of
interest method (merger) 2) purchase method. Amalgamation
when in the nature of purchase is called Absorption or
What is amalgamation?
# 7 In general term , when two or more companies engaged in
amalgamation is tow or more company are marger in a one
company no need for same nature of business
when two or more than two company join themselves to share a
certain part of profit is called amalgamation.the main
reason of amalgamation is cut throat competition in a
market.as an example A is a company and it faces economic
crisis(lack of money)then it no longer run itself at this
situation the company tries to joint itself with another
company o make profit.this particular activity is called
amalgamation ofa company.
Amalgamation is the coming together of two different
companies who in their own are not performing better so
they emerge these two companies with a common purpose of
making thier business follows the going concern principle.