The main difference between a subsidiary company and an affiliate has to do with the existing level of ownership by its parent company. The main difference between a subsidiary company and an Affiliate vs a Subsidiary. The business world is chock full of terms ordinary people may find confusing. A good example of words that often get interchanged or are not understood at all are ‘affiliate’ and ‘subsidiary’. These words appear in TV advertisements, posters, bank statements, and yet most people don’t know how to differentiate between the two. “Affiliate marketing” is when a seller has a website that sells the affiliate's products. The seller maintains the website, sells the products, and in return pays commission to the affiliates. Parent companies may refer to their level of ownership with the terms affiliate, associate, and subsidiary. Key Difference: An ‘affiliate’ is a type of inter-company relationship in which a company owns less than a majority of another company’s stock. A ‘subsidiary’, also known as a daughter company, is a company that is completely or partially owned by the parent company. Corporate, securities, and capital markets, a person or entity that directly or indirectly controls, is controlled by, or is under common control with another person or entity (Rule 405, Securities Act and Rule 12b-2, Exchange Act).Examples of affiliates include executive officers, directors, large stockholders, subsidiaries, parent entities, and sister companies.
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