The books of Account of different companies belonging to the same management or owners are required to be consolidated to present the financial position of the group of companies as a whole. This is mandatory in many developed countries and currently shareholders would rather know the performance of the group as a whole and not the performance of individual constituent companies.
Tally.ERP 9 simplifies the task of consolidation of accounts. You can consolidate the accounts of any number of companies as well as keep them separate.
The first step is to create a Group Company, which is simply a name and identity given to the merged accounts of constituent (member) companies of the group. A group company may also include other group companies.
Note: Do not confuse the word Group to refer to a member of the group! It simply contains the consolidated accounts of member companies. In other words, it is the parent company – under which you have the individual companies.