Difference Between Amalgamation And Absorption

Following are the main differences between amalgamation and absorption:

1. Liquidation

Two or more companies are liquidated in the process of amalgamation. One or more companies are liquidated in absorption.

2. Formation

In amalgamation, a new company is formed to take over the business of vendor companies. In absorption, no new company is formed, only purchasing or absorbing company take over the business of liquidated company.

3. Size

There is no such matter of size of amalgamating companies. Generally, size of purchasing company is greater than that of vendor company in absorption.