1. Companies may combine in following ways
(i) absorption
(ii) amalgamation
(iii) external reconstruction
(iv) internal reconstruction
(v) merger
a) any of above
b) none of above
c) any except (iv)
d) any except (v)
2. If the ABC Limited and DEF Limited are taken over by a new company XYZ Limited
a) it is called absorption
b) it is called amalgamation
c) it is called external reconstruction
d) it is called internal reconstruction
3. If the ABC Limited and DEF Limited are taken over by a new company XYZ Limited
a) ABC Ltd. and DEF Ltd. are known as the “Vendor Companies
b) ABC Ltd. and XYZ Ltd. are known as the “Vendor Companies”
c) XYZ Ltd. and DEF Ltd. are known as the “Vendor Companies”
d) XYZ Ltd. is known as the “Vendor Company”
4. If the ABC Limited and DEF Limited are taken over by a new company XYZ Limited
a) ABC Ltd. and DEF Ltd. are known as the “Purchasing Companies”
b) ABC Ltd. and XYZ Ltd. are known as the “Purchasing Companies”
c) XYZ Ltd. and DEF Ltd. are known as the “Purchasing Companies”
d) XYZ Ltd. is known as the “Purchasing Company”
5. If the business of an existing company ABC Limited is taken over by an existing company PQR Limited, it is called
a) external reconstruction
b) internal reconstruction
c) absorption
d) amalgamation
6. If the business of an existing company ABC Limited is taken over by an existing company PQR Limited,
a) ABC Ltd. is known as the “Vendor Company”; and PQR Ltd. is known as the “Purchasing Company”
b) ABC Ltd. and PQR Ltd. are known as the “Purchasing Companies”
c) PQR Ltd. is known as the “Vendor Company”; and ABC Ltd. is known as the “Purchasing Company”
d) ABC Ltd. and PQR Ltd. are known as the “Vendor Companies”
7. If the business of ABC Limited, a loss-making company, is taken over by a new company ABC (New) Limited, it is called
a) internal reconstruction
b) absorption
c) amalgamation
d) external reconstruction
8. If the business of ABC Limited, a loss-making company, is taken over by a new company ABC (New) Limited,
a) ABC Ltd. is known as the “Vendor Company”; and ABC (New) Ltd. is known as the “Purchasing Company”
b) ABC Ltd. and ABC (New) Ltd. are known as the “Purchasing Companies”
c) ABC (New) Ltd. is known as the “Vendor Company”; and ABC Ltd. is known as the “Purchasing Company”
d) ABC Ltd. and ABC (New) Ltd. are known as the “Vendor Companies”
9. When the merger involves liquidation of two existing companies and formation of one new company, it is called
a) internal reconstruction
b) absorption
c) external reconstruction
d) amalgamation
10. When the merger involves liquidation of one or more existing companies and formation of no new company, it is called
a) internal reconstruction
b) absorption
c) external reconstruction
d) amalgamation