12 December 2009
Practically; when you read the provisions of amalgamation; frequently two words are there:
1. Amalgamating co.- i.e. co. which will not remain after amalgamation
This co. is also known as Transferor co.
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2. Amalgamated co.- co. which absorb above company (resultant company). This will remain after amalgamation.
This co. is also known as Transferee co. and Purchasing Co.
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Abbreviate these co. as such :
First Co. A Second Co. R
Keep these terms in your fast track memory.
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Two types of amalgamation :
1. In Nature of Merger : when satisfies all the following conditions-
1. All the assets and liabilities of Co. A goes into co. R. 2. 90% of shareholders remain same.(except shareholding of Co. R in Co. A already hold) 3. consideration is paid in equity shares to the shareholders of Co. A in Co. R 4. Same business is carried on 5. No adjustment in book value of assets and liabilities in Co. R (except some uniformity of accounting policies).
If any of five conditions are not satisfied; then it is amalgamation in nature of Purchase.
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Now read the provisions of AS-14.
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I hope you will understand the provisions.
Ca Rakhecha Surat
Querist :
Anonymous
Querist :
Anonymous
(Querist)
17 December 2009
Thank you very much,sir for your reply answer. I hope this intimation will be yseful to me.