What Is An Affiliate

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What Is An Affiliate
What Is An Affiliate
Video: What Is An Affiliate
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Lists of affiliated persons, for example, banks, often found in the media, mislead ignorant readers. Who are these affiliates and why are these lists printed?

Affiliate
Affiliate

Definition

An affiliated person is a person (natural or legal) capable of influencing the activities of individuals or legal entities that carry out entrepreneurial activities. In simple words, an affiliated person (person or organization) is directly involved in control over a joint stock company.

The term “affiliated person” used in Russian law was borrowed from Anglo-American law. The English verb affiliate denotes the verbs: connect, join, connect.

“Affiliating someone” means putting an official of another in the management of one firm.

In European law, affiliated companies are firms that are dependent on other companies. In Russian legislation, the word affiliated is applied to both dependent and dominant persons. The main sign of affiliation is the ability to influence entrepreneurial activity.

Affiliate signs

An important feature of an affiliated person is the existence of a dependent relationship between an individual or legal entity and an affiliate of this individual or legal entity.

This dependence manifests itself in the following cases:

- if an individual or legal entity owns a certain share of the authorized capital of the legal entity with the right to vote in the management body

- if an individual or legal entity, due to a certain legal status (for example, the status of a general director or fund manager), has the right to give binding instructions

- if there are certain family ties (kinship) between individuals

Affiliate of a legal entity

Affiliated entities of legal entities persons can be:

- member of the supervisory board or board of directors, member of the collegial executive body

- an individual or legal entity entitled to dispose of more than 20% of the total number of votes attributable to voting shares or constituting the authorized capital contribution from the share of a legal entity

- a legal entity, if it is a member of a FIG (financial and industrial group).

“Affiliation procedure” is the process of one company entering the structure of another without changing the owner.

In this case, its affiliated person may also be members of the boards of directors, members of the collective management bodies of FIGs and persons participating in FIGs with powers of executive bodies.

Affiliated person of an individual

Affiliated persons nat. persons engaged in entrepreneurial activity can be:

- persons who belong to the same group of persons as this individual

- a legal entity, where nat. the person has the right to dispose of 20% of the total number of votes attributable to voting shares or the contribution from the share of the legal entity constituting the authorized capital.

Joint stock companies regularly submit information about their affiliates to the Federal Securities Commission. Also, any joint stock company is obliged to prepare lists of its affiliates for annual publication in the media. In addition, the lists must indicate the types and number of shares held by affiliates.

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