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State and explain forms of business amalgamations.

State and explain forms of business amalgamations.

Answers

Kavungya
Merger
In a merger, two companies cease to exist as separate entities and register a single entity where
both share a common stake. The managers of the two firms sign an agreement stipulating the
terms and conditions of the merger and depending on which firm was larger before the merger,
considerations such as lines of reporting are realigned. A new legal name will be identified that
takes into account the identity of the previous entities.

Acquisition
In an acquisition, two companies combine resources to run as a single entity but in this case, the
company that is usually larger than the other in terms of financial resources and experience, will
in essence take over the operations and management of the new entity.

Take over
In a takeover, the entrepreneur of a business will relinquish ownership of his firm to another,
usually larger company in exchange for a financial consideration.

Franchise
In a franchise, a sponsor identifies someone with an idea or a proposal and decides to fund his
project and give it the financial boost it needs to start off. In this case, the entrepreneur is the
franchisee who operates under the franchiser's name.
Kavungya answered the question on April 10, 2021 at 10:40

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