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Amalgamation Notes (Easy to Learn)

Amalgamation Notes Complete

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Definition of ‘Amalgamation’ :

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. Amalgamating companies are those two or more companies which willingly unite (combine) to carry on their business activities jointly.
  2. Amalgamated company is a newly formed union (alliance) of two or more amalgamating companies. It has a separate legal existence with a new unique name.

Now let’s discuss the meaning of amalgamation with some examples.

To amalgamate means to unite or combine or blend. It is an act or process in which two or more things fuse together to form a new potent thing.

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Amalgamation is an emerging trend of today’s business world. It results in the formation of a new, strong, stable and large company. It also results in the growth and expansion of this newly formed company.

During amalgamation, two or more companies willingly come together to cooperate with each other and diversify (expand) their business activities.

After amalgamation, two or more companies dissolve (disintegrate) and lose their individual legal status (existence), hence they no longer exist anymore. However, they again re-establish themselves, but now jointly, by forming a new company having a unique name.

Thus, amalgamation results in the formation of a new (separate) company which has a unique name, logo, identity and existence.

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