Question

Britton Corporation and Sheridan Corporation combine to become a new corporation known as Sheritton Corporation. This process is known as a

a. merger
b. consolidation
c. ratification
e. novation
f. reorganization

Answer 1

The combination of Britton Corporation and Sheridan Corporation to form Sheritton Corporation is called a consolidation. It exemplifies a corporate merger, uniting two previously independent entities into one organization under common ownership.

Step-by-step explanation:

When Britton Corporation and Sheridan Corporation combine to create Sheritton Corporation, the process is known as a consolidation. A corporate merger happens when two previously separate entities unite to form a new singular entity. There are various motivations behind a merger, such as growth, efficiency improvement, acquisition of new product lines, competitive strategy, or the desire to shed an existing corporate identity.

Despite variations in operational visibility post-merger, like acquisitions where a purchased firm may retain its name, the end result is two firms under common ownership. These activities are often closely monitored under antitrust laws to maintain market competition.