what is a group of companies as per indian company act ?

Question

Can some one explain wht is the adv of starting group of companies instead of separate companies ?

Answer 1

A group of companies consists of a parent and all its subsidiaries.

Consolidated accounts are prepared by combining the accounts of each of the entities comprising the economic entity and this aggregated information shall be presented as one set of accounts. If you have access to the accounts of just one separate entity, you will not see the big picture - you will not realise how large the group is or how diversified or what level of profits or losses the group taken as a whole is making.

The provision of one set of accounts for the economic entity enhances the ability of those users of financial reports who have an interest in the existence of the economic entity to assess the performance, financial position, and financing and investing of the economic entity, rather than having to rely solely on individual accounts.