Distinction between amalgamation absorption n external reconstruction
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Amalgamation is when two or more companies merge and form one company ,with the same balance sheet.
In amalgamation,the identity of the two companies exist and survive only that they pulled their interests,liabilities and assets together.
Amalgamation consists of two companies of the same size and stature.
External reconstruction refers to the forming of a new company to take over the assets and liabilities of the old one.
The deliberate purpose of forming this company is to take over the old one,thus the old company is liquidated and a new one is formed.
It doesn't require a courts permission to form an external reconstruction.
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