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Simple English definitions for legal terms
business combination
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A quick definition of business combination:
A business combination is when two or more companies come together and are treated as one company for accounting purposes. This means that their financial information is combined and reported as if they were one company.
A more thorough explanation:
A business combination is when two or more companies come together to form a single entity for accounting purposes. This can happen in a few different ways:
- When one company acquires another company
- When two companies merge to form a new company
- When two companies combine their assets to form a new company
For example, if Company A buys Company B, they would be considered a business combination. Company A would now include all of the assets and liabilities of Company B, and the two companies would be considered one entity for accounting purposes.
Another example would be if Company C and Company D decided to merge and form a new company, Company E. Company E would be a business combination of Company C and Company D, and would include all of their assets and liabilities.
Overall, a business combination is a way for companies to come together and combine their resources to create a stronger, more competitive entity.