amalgamation of partnership firms means?

Amalgamation of firms takes place when two or more firms working independently merge their business into a single unit. The firms engaged in identical business combine their business activities and form into a new firm know as amalgamated firm.

The result of amalgamation is that the combining units lose their independent identity and the partners of the combining firms become the partners of the new firm.


Objectives of Amalgamation:

(1) To achieve the economies of large scale operations.
(2) To avoid cut throat competition.
(3) To increase capital.
(4) To enhance the efficiency of the firm by utilizing the different talents of the partners.
(5) To maximize profits to economies of production.
(6) To minimize the cost of production to large-scale production.
(7) To establish monopoly in a particular trade.

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