2.3.3.1 Introduction

The second main element of a group that constitutes a single entity from an economic perspective is the fact that there is integration1 within the group.2 There should be an economic unity with organizational alliance. Solely controlling an entity does not necessarily mean that the parent and subsidiary company form one integrated business enterprise. If two commonly owned entities have no economic ties with one another, except the ownership by a common parent, there is no group from an economic perspective.3 The shareholder may hold the interest for the purposes of trading it as stock or as a portfolio investment.4 Therefore, it should be determined whether there is an integrated business. There should be an economic value flow between the various parts of the economic enterprise. The group members should have intra-group economic relationships, with business activities that ‘are integrated with, dependent on and/or contribute to each other’.5

First, integration as such is described on a high-level basis. Subsequently, the difference between shareholdings held as current floating assets versus capital assets is elaborated upon. The section is finalized with an interim conclusion.