Amalgamation Summary 1
MEANING OF AMALGAMATION:
In an amalgamation two or more companies are combined into one by merger or by one taking over the other. Therefore the term “amalgamation” contemplates two kinds of activities;
i) Two or more companies join to form a new company or, ii) Absorption and blending of one by the other.
Thus amalgamation includes absorption.
The purpose of companies joining together is to secure various advantages such as economies of large scale production, avoiding competition, increasing efficiency, expansion, etc.
The companies going into liquidation or merged companies are called vendor companies or transferor companies. The new company which is formed to takeover all the liquidated companies or the company with which the transferor company is merged is called transferee or vendee.
In case of amalgamation the assets and liabilities of transferor company are amalgamated and the transferee company becomes vested with all such assets and liabilities.
DEFINITIONS: The following terms are used in this standard with the meanings specified.
(a) Amalgamation means an amalgamation pursuant to the provisions of the Companies Act, 1956 or any other statute which may be applicable to companies.
(b) Transferor company means the company which is amalgamated into another company.
(c) Transferee company means the company into which a transferor company is amalgamated.
(d) Reserve means the portion of earnings, receipts or other surplus of an enterprise (whether capital or revenue) appropriated by the management for a general or a specific purpose other than a provision for depreciation or diminution in the value of assets or for a known liability.
(e) Amalgamation in the nature of merger is an amalgamation which satisfies all the following conditions.
(i) All the assets and liabilities of the transferor company become, after amalgamation, the assets and liabilities of the transferee company.
(ii) Shareholders holding not
In an amalgamation two or more companies are combined into one by merger or by one taking over the other. Therefore the term “amalgamation” contemplates two kinds of activities;
i) Two or more companies join to form a new company or, ii) Absorption and blending of one by the other.
Thus amalgamation includes absorption.
The purpose of companies joining together is to secure various advantages such as economies of large scale production, avoiding competition, increasing efficiency, expansion, etc.
The companies going into liquidation or merged companies are called vendor companies or transferor companies. The new company which is formed to takeover all the liquidated companies or the company with which the transferor company is merged is called transferee or vendee.
In case of amalgamation the assets and liabilities of transferor company are amalgamated and the transferee company becomes vested with all such assets and liabilities.
DEFINITIONS: The following terms are used in this standard with the meanings specified.
(a) Amalgamation means an amalgamation pursuant to the provisions of the Companies Act, 1956 or any other statute which may be applicable to companies.
(b) Transferor company means the company which is amalgamated into another company.
(c) Transferee company means the company into which a transferor company is amalgamated.
(d) Reserve means the portion of earnings, receipts or other surplus of an enterprise (whether capital or revenue) appropriated by the management for a general or a specific purpose other than a provision for depreciation or diminution in the value of assets or for a known liability.
(e) Amalgamation in the nature of merger is an amalgamation which satisfies all the following conditions.
(i) All the assets and liabilities of the transferor company become, after amalgamation, the assets and liabilities of the transferee company.
(ii) Shareholders holding not