What Is an Affiliate? Affiliate is used primarily to describe a business relationship wherein one company owns less than a majority stake in the other companys stock. In this case, one company becomes affiliated with another in order to sell its products or services, earning a commission for doing so.
What does it mean to be an affiliate with a company?
What Are Affiliated Companies? Companies are affiliated when one company is a minority shareholder of another. In most cases, the parent company will own less than a 50% interest in its affiliated company. Two companies may also be affiliated if they are controlled by a separate third party.
Are subsidiaries considered affiliates?
A subsidiary is a company whose parent company is a majority shareholder that owns more than 50% of all the subsidiary companys shares. An affiliate is used to describe a company with a parent company that possesses 20 to 50% ownership of the affiliate.