Asked by Caden Coulson on Apr 30, 2024
Verified
A combination of two entities in which only one legally ceases to exist is:
A) a subsidiary.
B) a parent company.
C) a consolidation.
D) a merger.
Legal Entity
A legally constituted organization that has the authority to enter into contracts, sue and be sued, and own assets separately from its owners or members.
Consolidation
The act of merging multiple entities into one, often to streamline operations and reduce costs, or in financial terms, combining financial statements of parent and subsidiary companies.
Subsidiary
A company that is controlled by another company, typically referred to as the parent company.
- Identify assorted types of mergers and understand their specifics and impacts.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
D
Explanation :
A merger is a combination of two entities in which one ceases to exist as a separate legal entity and becomes part of the surviving entity. In contrast, a subsidiary is a separate legal entity controlled by another company, while a parent company is a company that has control over another company or multiple companies. A consolidation involves the creation of a new entity from the merging of two or more companies.
Learning Objectives
- Identify assorted types of mergers and understand their specifics and impacts.