Duhaime's Law Dictionary


Consolidation Definition:

The union of two or more corporations into one corporate body after which the constituent corporations cease to exist.

Related Terms: Amalgamation, Merger

Consolidation of two or more companies to form a single corporate entity is a form of amalgamation.

The other form is a merger.

In Kemos, Justice Roney wrote:

"A consolidation is the union of two or more corporations into one corporate body, after which the constituent corporations cease to exist.

"A merger is the absorption of one corporation into another....

"[A]malgamation is ... used to designate a consolidation or merger."

In Fordyce, Justice Groner wrote:

"[A] consolidation ... occurs where all the corporations involved become extinct and go out of existence as separate organizations and a new and different corporation is created to take over the assets of the dissolved coroporations.

"[C]onsolidation (involves) a dissolution of the companies consolidating and a transfer of corporate assets and franchises to a new company."

REFERENCES:

  • Fordyce v Helvering, 76 F. (2d) 431 (1935)
  • Kemos Inc. v Bader, 545 F. 2d 913 (1977)

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