|
Generally two companies are affiliated when one owns less than a majority of the voting stock of the other, or when both
are subsidiaries of a Business company. A subsidiary is a company of which more than 50% of the voting shares are owned by
another corporation, termed the parent company .
A subsidiary is always, by definition, an affiliate, but subsidiary is the
preferred term when majority control exists. In everyday use, affiliate is the correct word for intercompany relationships, however indirect, where the parent-subsidiary relationship does not apply.
Banking Act of 1943:
Any organization that a bank owns or controls by stock holdings, or which the bank's shareholders own,
or whose officers are also directors of the bank.
Internal Revenue Service: for purposes of consolidated tax returns an affiliated group is composed of companies whose parent
or other inclusive corporation owns at least 80% of voting stock.
|
