What does it mean if a company is affiliated?

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 . In the business world, affiliated companies are often simply called affiliates.

What is an affiliate company?

In most cases, affiliates are associates or associated companies, which describes an organization whose parent has a minority stake in it. There are several ways that companies can become affiliated. A company may decide to buy out or take over another one, or it may decide to spin off a portion of its operations into a new affiliate altogether.

How do affiliated companies work?

Affiliated companies exist when one business has less than 50% ownership by individual shareholders of another entity. Learning how affiliated companies work can help you determine the nature of a company's business relationships. In this article, we define affiliated companies, including their benefits and how they work. Key takeaways: