GENERAL KNOWLEDGE

Detailed explanation-1: -An amalgamation is a combination of two or more companies into a new entity. Amalgamation is distinct from a merger because neither company involved survives as a legal entity. Instead, a completely new entity is formed to house the combined assets and liabilities of both companies.

Detailed explanation-2: -During an amalgamation, the transferor company is absorbed by the stronger transferee company which then leads to the formation of a completely new company with more assets and a stronger customer base. The process of amalgamation helps to increase the cash resources, eliminate competition and save companies on taxes.

Detailed explanation-3: -Amalgamation of partnership firm is done to achive the following objectives : i) To avoid the cut-throat competition. ii) To minimize the common expenses of business. iii) To get advantage of large scale business.

Detailed explanation-4: -There are two methods of accounting using which the accounts of combining entities amalgamate. One is by pooling the interests of the shareholders. Another is by the purchase method, applicable for combinations that occur through the nature of the purchase.