merger
Definition
A merger is when two separate companies combine to form a single new company, with one business essentially absorbing the other. The resulting entity takes on all the assets, debts, contracts, and obligations of both original companies.
Example
If your bakery merges with a competing bakery across town, the two businesses become one operation under a single name, with one set of ownership and one bank account.
Watch Out
When you merge with another business, you automatically inherit all of their debts and legal problems, even ones you didn't know about before the deal closed.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.