Affiliate Definition

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Business Definition for: affiliate
Dictionary of Finance and Investment Terms

In general: 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 third 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 1933: 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.
Interstate Commerce Commission, Account 706:

1. Controlled by the accounting company alone or with others under a joint agreement.
2. Controlling the accounting company alone or with others under a joint agreement.

Investment Company Act: company in which there is any direct or indirect ownership of 5% or more of the outstanding voting securities.
Dictionary of Banking Terms

any firm closely related to another through ownership by a parent company. If only two companies are involved and one owns more than 50% of the stock in the second, the preferred term is subsidiary .

1. organization owned or controlled by a bank through stock ownership, or whose officers are directors of a bank holding company or Financial Holding Company (FHC) .
2. company owned by a federally insured bank or bank holding company that performs services such as credit card processing or data processing for financial institutions. Except for deposit taking, bank-owned service corporations engage in a wide range of bankrelated functions, that are approved by the Federal Reserve Board as permissible activities for bank holding companies. See also Regulation Y .
3. financial institution that issues MasterCard International or Visa International debit cards and credit cards. Also called agent bank ..


1. any company directly or indirectly owning 5% or more of the voting stock in another company, as defined by the Investment Company Act.
2. company whose actions are controlled by another company through a joint agreement, or a company that, with others, controls the accounting company.

Dictionary of Marketing Terms

1. independently owned radio or television station that has a contractual agreement with a network to devote a portion of its broadcast time to programs originated by that network. The network offers the programming in exchange for commercial time , which can then be sold to a national advertiser. With a string of affiliates strategically positioned throughout the country, a network can offer advertisers wider viewing audiences and thus attract national corporations with large advertising budgets.
2. company that partners with other companies for marketing purposes. On the Internet, an affiliate creates a link from its web site to an affiliate’s site. The originating web site earns a commission on any sales made via those links. Affiliate marketing works best for mass appeal products. has thousands of affiliate sites to sell books. Affiliate relationships are also a common component of loyalty programs . For example, a supermarket frequent-buyer program might offer hotel discounts or fast-food meal upgrades.


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