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Answer Posted / prachi jindal
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
amalgamation.
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
Aquisition.
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