alabamared
Stuart Pearce
Rich. said:Not strictly true.
It's a way for amalgamation of various enterprises, and allows for people with differing financial levels to buy/own a definite percentage.
Forming a new company also insulates your pre-existent companies from any liabilities that may arise through the new venture.
Spot on; this occurs in most takeovers / buy outs / mergers. Usually referred to as "NewCo"