What is an affiliate?

Kristina Firsova
Kristina Firsova
March 26, 2013
What is an affiliate?

If you are engaged in business and are related to entrepreneurial activities, then you need to understand what an affiliate is. Since it is the person who has the right to influence the course and development of your company or firm, is called an affiliate. That is, if you have opened your business, have a partner who is the same investor as you, he has the right to make adjustments or take part in managing the affairs of your company. This person will be affiliated with you. Regardless of whether this person is a natural or legal person, he can have an impact in the form of any changes aimed at the operation of your company.

For a joint stock company, the question of who such affiliates are is also relevant. It is in the plural, since most often shareholders are more than two people. This is especially true for large corporations. For example, you are a co-owner of a large joint-stock company.Your partners with a share of at least 10% of their total number are affiliates. Or by persons who are able to introduce their ideas, make changes to the charter of a corporation, influence the expenditure of funds, etc.

An affiliate can be the person who manages the company with you, as well as the one who has invested his share in its development. A person who is able to change the company's charter, adjust work, reduce / increase wages, maybe your co-founder, even if he is not in the business of the company, does not follow them daily. For example, you have opened a company, invested in it 60% of the capital. Your companion made his 40%, but after the formation of the company, he did not attend the meetings, did not discuss the work plan. This person has every right to make changes to the work of the company at any time.

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