Affiliated Companies

An affiliated company is a company that is owned or controlled by another company. The parent company owns a majority of the voting shares of the subsidiary company. The subsidiary company is not a separate legal entity from the parent company.

Affiliated companies are often used to reduce taxes or to avoid regulations. For example, a company may create a subsidiary company in a country with lower taxes. The subsidiary company can then sell products or services to the parent company at a higher price. This allows the parent company to reduce its taxes.

Affiliated companies can also be used to avoid regulations. For example, a company may create a subsidiary company in a country with less strict environmental regulations. The subsidiary company can then manufacture products in the country with less strict regulations. This allows the parent company to avoid the more strict regulations in its home country.

It is important to note that affiliated companies are not the same as subsidiaries. A subsidiary company is a separate legal entity from the parent company. An affiliated company is not a separate legal entity from the parent company.