ACCT 1B Lecture Notes - Lecture 22: Legal Personality
Document Summary
Asset acquisition: only the acquiring company or new company survives. The books of acquired company are closed and its na are transferred to books of acquiree. Stock acquisition: the acquired company"s books remain intact and consolidated f/s are prepared. The acquirer has an account investment in subsidiary on its own books. This does not imply anything about medium of exchange. A company can get control of another in a stock acquisition using cash, stock, debt or combo. What is given up? cash, debt, stock, combination. With a stock acquisition can get control by obtaining 51% or more. Difference between merger, acquisition and consolidation is a technicality. Merger one company acquires all na of another acquirer survives and the acquired ceases to exist as a separate legal entity. Consolidation new corporation formed to acquire 2 or more other corporations. The acquired companies cease to exist as legal entities.
