I am planning on combining two companies and my friends are telling me that I can either consolidate or merge the companies. I am not exactly sure of the difference between the two.
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Answer by Neha Sharma, Hillsdale 2036 NSW
- Consolidation is a term used to describe the combining of assets and liabilities of two or more entities.
- Merger on the other hand is a term used to describe the event in which one company ‘buys out’ or takes over another company. The company that is bought is dissolved.