Question

Difference between amalgamation and internal reconstruction

Answer 1

Amalgamation ÷

When two or more companies combined with each other to make new company it is called Amalgamation.

• It is also called External Reconstruction.
• It includes merger and acquisition of other companies.
• It does include any change in share capital of the company.
• It is More costly method than internal reconstruction.
• It is also very time consuming
• It refers to transfers of all assets and liabilities .

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Internal reconstruction .÷

When one company needs of change in its share capital is called internal reconstruction.

• It is also called Capital reduction.
• It does include any merger and acquisition.
• It is the change of share capital of company.
• It is less costly
• It is less time consuming than External Reconstruction.
• It does include transfer of all assets and liabilities to other companies.

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