Affiliated entity definition

What is an Affiliated Entity?

An affiliated entity is an organization that directly or indirectly controls another entity, or is directly or indirectly controlled by another entity, or which is under common control alongside another entity. Thus, an affiliated entity could be a parent company or a subsidiary company. The concept of control is considered to imply that one has the ability to alter the direction of management policies. Such control is usually associated with the number of voting shares held, but control could also be associated with the terms of a contract.

Affiliated entities may be associated with each other in some way, but they still exist as separate legal entities. This means that, despite any connections they may have, they operate with separate organizational structures, management teams, and operational processes.