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Dissolution of Partnership vs Firm

When one exis...

Question

When one existing company takes over the business of another company or companies, it is _____________.

A

Amalgamation

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B

Absorption

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C

Internal Reconstruction

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D

External Reconstruction

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Solution

The correct option is C Absorption
Amalgamation means merger of two or more companies and forming of altogether a new company.
In case of absorption, the company which is taking over(buying company) remains while one is taken over(selling company) dissolves.

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