Merger: A merger is a marriage of two businesses. It shares a lot of the characteristics of both an asset purchase and a stock purchase. In most cases, a "surviving" corporation will issue new stock to shareholders of a "disappearing" corporation in exchange for their stock in the disappearing corporation. The surviving corporation then takes title to all the disappearing corporation's assets, and the disappearing corporation ceases to exist.

• A merger is the time-tested vehicle for recognizing the united strength of combining two or more business entities into a single venture. There is no "buyer" or "seller" in a merger so the "us against them" mentality tends not to get in the way.
  
  
• A merger will also allow for economies of scale. While employees in duplicate positions may be laid off, the intent is to improve the bottom line by cutting overhead and increasing efficiencies.
  
  
• Tax consequences can be neutralized or deferred. Properly structured, swapping stock will not result in any taxable gain to the shareholders of either of the merging organizations.

There are many hidden pitfalls to any merger or acquisition, so it is essential to get good legal and financial advice before agreeing to anything.