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Classification Of Business Combination-Absorption

Earlier article explained on a form of business combination which is amalgamation.

This article deal wih the what is absorption.

Absorption of company occurs when one dominant company acquired the assets and liabilities of another company. As a result, the company being acquired is liquidated.

Tabulate below is the characteristic of Absorption:

Characteristics Of ABSORPTION:
 
  • The company that absorbs the small company will become bigger.
  • The existing shareholders of the absorbed company  form part of the shareholders of the new company.
  • No new company is formed

This entry was posted on Monday, October 22nd, 2007 at 9:46 pm and is filed under Company Reconstruction. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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