What is a Surviving Company?

A surviving company is the entity that gains control of all net assets and operations after a business combination has been completed. The surviving company could be one of the entities originally entering into the business combination, or it could be an entirely new entity. The designation of the surviving entity is frequently based on the tax structure of the combination, to minimize the tax burden on the combined entity or its shareholders. The designation may also be based on the relative size of the two entities, where the larger one is usually the surviving entity.

Example of a Surviving Company

Alpha Company acquires the shares of Beta Company in an all-cash purchase. Subsequent to the purchase, the Beta entity is dissolved and all assets and liabilities of Beta Company are absorbed into Alpha Company.