What is an Associated Company?
Associated Company is a term that may refer to any two companies that are linked by a common corporate ownership. This type of association is typically seen in large corporations which are composed of several different companies. In this context, an associated company can either be a subsidiary or a sister company.
Associated Company in More Detail
A subsidiary is a company that is owned or controlled by a larger company. The parent company holds a controlling stake in the subsidiary, which means that it has the ability to influence or direct its operations. This type of association is common in the business world and is often used to expand into new markets or to take advantage of different tax regulations.
A sister company, on the other hand, is a company that is owned by the same parent company as another company but operates independently. This type of association is common in large companies that have multiple divisions or businesses under one corporate umbrella. Sister companies are usually set up to increase efficiency or to capitalize on economies of scale.
In both cases, an associated company is one that is owned or controlled by the same parent company. This type of association has numerous benefits for the parent company, such as increased market share, access to additional resources, and a better understanding of the industry. Furthermore, it also allows the parent company to diversify its business operations and spread risk across different subsidiaries.
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