What is an affiliated group?

An affiliated group refers to a collection of entities that are connected through common ownership or control, sharing a significant degree of commonality among their operations, leadership, or financial interests. This interconnectedness can include relationships between parent companies, subsidiaries, and other entities within the group, all of which contribute to the overall business operations and strategy. This definition is crucial for understanding tax implications, regulatory requirements, and liability considerations within business operations.

The concept emphasizes that the members of the group benefit from their relationship, enabling various operational efficiencies, combined resources, and strategic advantages. In the context of business practices, recognizing and properly defining affiliated groups is essential for ensuring compliance with various regulations, particularly those related to taxation and insurance.