The two combinations involved are mergers and acquisitions. According to Hayes (2022), mergers and acquisitions consolidate the firm’s assets through financial transactions between the companies. In the case study, if Marge Corporation opts for acquisition, it would be all assets that Lisa Corporation had regardless of whether they were current or fixed. For instance, Marge will acquire the manufacturing of car parts during the acquisition process. However, the current and non-current liabilities that Lisa Corporation had would not be taken care of by the Marge Corporation; they are not transferred to Marge Corporation. The Marge Corporation would have to buy 50% of Lisa Corporation’s stocks in acquisition. Marge Corporation would remain in existence, while Lisa Corporation would cease to exist. However, Marge Corporation would acquire some of Lisa’s current and non-current liabilities as part of the acquisition, and then it would be obliged to meet these financial liabilities.
However, Marge Corporation may consider mergers where it would consider combining with Lisa’s corporation to form a new firm. Under the new company, both assets and liabilities for Lisa and Marge corporation would be combined (Hayes,2022). Lisa and Marge would no longer exist, and the new firm would have a new name. In addition, the new company would amend the prevailing articles of incorporation to reflect the guidelines of the new company. Property and liabilities transfer takes place during the merger process. Homer and Bart would start a new corporation by merging the Marge and Lisa businesses. The merged company is responsible for taking on the liabilities and taking possession of the assets of the two merged companies. Asset and liability transfers. Articles of incorporation must be amended to reflect changes to the company’s name, organizational structure, and other details. The articles of incorporation are now in effect.
Reference
Hayes, A. (2022, September 17). Mergers and Acquisitions (M&A). Investopedia. https://www.investopedia.com/terms/m/mergersandacquisitions.asp
Cite This Work
To export a reference to this article please select a referencing stye below:
