Question

When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as
1 point
A. Amalgamation
B. Absorption
C. Internal Reconstruction
D. External Reconstruction

Answer 1

When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as Amalgamation.

Answer 2

Answer:

When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as Amalgation

Explanation:

According to the Indian Companies Act of 2013, an amalgamation occurs when two or more companies come together to form a new company. Basically, it's done to boost financial resources, lessen competition, etc.

Amalgamation:

• A merger unites two or more businesses to form a new organization.
• A merger and an amalgamation are not the same thing because neither business exists as a separate legal entity.

Advantages of Amalgamation:

• Facilities for R&D are expanding
• Operating expenses can be cut.
• The prices of the products remain stable.

Disadvantages of Amalgamation:

• There could be employee layoffs.
• There can be more debt to repay.

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