If you want to group some layers that are already in a composition, you can precompose those layers. Precomposing layers places them in a new composition, which replaces the layers in the original composition. The new nested composition becomes the source for a single layer in the original composition. The new composition appears in the Project panel and is available for rendering or use in any other composition. You can nest compositions by adding an existing composition to another composition, just as you would add any other footage item to a composition. Precomposing a single layer is useful for adding transform properties to a layer and influencing the order in which elements of a composition are rendered.
Nesting is the inclusion of one composition within another. The nested composition appears as a layer in the containing composition.
A nested composition is sometimes called a precomposition, which is occasionally abbreviated in casual use to precomp or pre-comp. When a precomposition is used as the source footage item for a layer, the layer is called a precomposition layer.
During rendering, the image data and other information can be said to flow from each nested composition into the composition that contains it. For this reason, nested compositions are sometimes referred to as being upstream of the compositions that contain them, and the containing compositions are said to be downstream of the nested compositions that they contain. A set of compositions connected through nesting is called a composition network. You can navigate within a composition network using the Composition Navigator and Mini-Flowchart. (See Opening and navigating nested compositions.)
Precompositions in After Effects are similar to Smart Objects in Adobe Photoshop.