Business reasons, and not tax incentives, constitute the primary motivation for most corporations to form a conglomerate and file tax and financial accounting reports on a consolidated basis.

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Most corporations form conglomerates primarily for business reasons such as diversification, entering new markets, achieving economies of scale, and enhancing competitive positioning rather than for tax incentives. Tax benefits can be a factor but are generally secondary to the strategic business objectives.

Business Reasons, and Not Tax Incentives, Constitute the Primary Motivation