Difference Between Amalgamation And Absorption
The main dissimilarities or difference between amalgamation and absorption can be pointed out as follows:
1. Meaning
Amalgamation: Formation of new company by liquidating two or more companies of similar business .
Absorption: Large company takes over the small company of similar type of business.
2. Liquidation
Amalgamation: At least two companies should be liquidated to form new company.
Absorption: At least one company should be liquidated
3. Formation Of New Company
Amalgamation: New company is created to take over the business of old or liquidated companies.
Absorption: New company is not created, only larger company purchase small company
Also Read:
Also Read:
4. Size Of The Company
Amalgamation: Generally, the size of companies are similar but size does not matter in amalgamation.
Absorption: Absorbing or purchasing company is bigger in size than liquidating companies.
Amalgamation Vs Absorption (Comparison Chart)
I hope this post is helpful to understand the difference between amalgamation and absorption and to make comparison between them.
Amalgamation Vs Absorption (Comparison Chart)
Basis For Difference
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Amalgamation
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Absorption
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Introduction
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Combination of two or more companies to form a new company
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Purchasing or taking over the small company by big company
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New Company
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Formed
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Not formed
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Liquidation
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At least two companies are liquidated
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At least one company is liquidated
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Size Of The Company
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It takes place between similar sized companies
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Absorbing company is bigger in size
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I hope this post is helpful to understand the difference between amalgamation and absorption and to make comparison between them.
