No two lithium ion battery cells can ever be the same. There are variations in state of charge, capacity, impedance, and temperature characteristics. These slight differences lead to cells being disproportionately charged or discharged when they are connected in series. This shortens battery life, and even total breakdown of cells is possible.
To solve these issues a balancing circuit is required. This app note from Atmel provides a balancing circuit for lithium ion batteries using inductive or capacitive methods. It is based on the ATA6870 battery management IC.
Active balancing with capacitors is used when charging currents are below 50mA, while the Inductive method is used for currents of up to 1A and more.