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MERGER WITH COMMON DIRECTORS

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(Querist)
10 November 2010 Dear Sir,

I want to ask a question about a merger between say,Company A pvt.ltd. and Company B pvt.ltd.

They have common directors.

Now,A will absorb B pvt.ltd. and the business of B will be carried henceforth by A pvt.ltd.

Please tell me whether A will have to issue shares to the common directors at all.

What could be the suggested accounting entries in both the Company's books in this regard ?
Please help me out !!



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Tilak Agrawal

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Tilak Agrawal (Expert)
10 November 2010 Dear Subhankar

After Purchase of business by A Ltd the shareholders of B ltd have to be given Purchase Consideration, which is usually made by way of issue of shares.

Directors in the capacity of shareholders will receive shares.

Accounting entries can be referred from any CA Final Book of Accounts.
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