Ontario Barrister and Solicitor Practice Exam

What happens during an amalgamation?

1. One company changes its name.

2. One company assumes the assets, rights, and liabilities of another company.

3. One company dissolves without any legal activities.

4. Both companies merge to form a new entity.

The correct answer is: One company assumes the assets, rights, and liabilities of another company.

During an amalgamation, one company typically takes on the assets, rights, and liabilities of another company, forming a new entity or maintaining the existing company's name and legal activities. Option A is incorrect because changing the name of a company does not necessarily indicate an amalgamation is taking place. Option C is incorrect because a dissolution refers to the legal end of a company, not a combination of two companies. Option D is incorrect because a merger is a specific type of corporate combination, but not all amalgamations result in a new entity or the dissolution of one company.