Affiliated company là gì

Peggy James is a CPA with 8 years of experience in corporate accounting & finance who currently works at a private university.

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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 một nửa interest in its affiliated company. Two companies may also be affiliated if they are controlled by a separate third buổi tiệc ngọt. In the business world, affiliated companies are often simply called affiliates.


The term is sometimes used to lớn refer lớn companies that are related lớn each other in some way. For example, Bank of America has many different affiliated companies including Bank of America, U.S. Trust, Landsafe, Balboa, và Merrill Lynch.


Two companies are affiliated when one is a minority shareholder of another. The parent company generally owns less than a 1/2 interest in its affiliated company, and the parent keeps its operations separate from the affiliate. Parent businesses can use affiliates as a way lớn enter foreign markets.Affiliates are different than subsidiaries, which are majority-owned by the parent company.

Companies may be affiliated with one another to get into a new market, to maintain separate brvà identities, khổng lồ raise capital without affecting the parent or other companies, & lớn save on taxes. In most cases, affiliates are associates or associated companies, which describes an organization whose parent has a minority stake in it.


Understanding Affiliated Companies

There are several ways companies can become affiliated. A company may decide to lớn buy out or take over another one, or it may decide to lớn spin off a portion of its operations into lớn a new affiliate altogether. In either case, the parent company generally keeps its operations separate from its affiliates. Since the parent company has a minority ownership, its liability is limited, và the two companies keep separate management teams.


Affiliates are a comtháng way for parent businesses to lớn enter foreign markets while keeping a minority interest in a business. This is especially important if the parent wants to lớn shake off its majority stake in the affiliate.


There is no single bright-line thử nghiệm to determine if one company is affiliated with another. In fact, the criteria for affiliation changes from country to lớn country, state to state, & even between regulatory bodies. For instance, companies considered affiliates by the Internal Revenue Service (IRS) may not be considered affiliated by the Securities & Exchange Commission (SEC).

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Affiliates Versus Subsidiaries

An affiliate is different from a subsidiary, of which the parent owns more than một nửa. In a subsidiary, the parent is a majority shareholder, which gives the parent company"s management & shareholders voting rights. Subsidiary financials may also appear on the parent company"s financial sheets.


But subsidiaries remain separate legal entities from their parents, meaning they are liable for their own taxes, liabilities, and governance. They are also responsible for following the laws and regulations where they are headquartered, especially if they operate in a different jurisdiction from the parent company.


An example of a subsidiary is the relationship between the Walternative text Disney Corporation and sports network ESPN. Disney owns an 80% interest in ESPN, making it a majority shareholder. ESPN is its subsidiary.


In e-commerce, an affiliate refers to lớn a company that sells the products of another merchant on its website.


SEC Rules Surrounding Affiliates

Securities markets around the world have rules that concern affiliates of the businesses they regulate. Here again, these are complex rules that need khổng lồ be analyzed by local experts on a case-by-case basis. Examples of rules enforced by the SEC include:


Before disclosing nonpublic personal information about a consumer to a nonaffiliated third buổi tiệc ngọt, a broker-dealer must first give a consumer an opt-out notice & a reasonable opportunity khổng lồ opt out of the disclosure.Broker-dealers must maintain and preserve certain information regarding those affiliates, subsidiaries, and holding companies whose business activities are reasonably likely to have a material impact on their own finances and operations.

Tax Consequences of Affiliates

In nearly all jurisdictions, there are important tax consequences for affiliated companies. In general, tax credits and deductions are limited to one affiliate in a group, or a ceiling is imposed on the tax benefits that affiliates may reap under certain programs.

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Determining whether companies in a group are affiliates, subsidiaries, or associates is done through a case-by-case analysis by local tax experts.


Chuyên mục: Công Nghệ