Reverse Merger

Reverse Merger’ is a coined term generally used in those cases of mergers where a company having higher networth is merging into a company having networth lower than it.

here a profit making co. merges into a loss making co.

This happens when loss making company acquires profit making company.This is generally practices due to taking advantage of loss of the company for tax purpose.if profit making company acquires loss making company then loss of merging company will not be considered for tax pupose.