Business language uses various terms and concepts that may be unfamiliar to the average person. Their mention is so rare that many people are not even aware of their existence. One such term is “affiliation.” Let's find out what affiliated companies mean and look at the structure of such organizations.

An affiliate company is a company that depends on another organization

Meaning of the term

Affiliated companies are enterprises that have a stake in the main company, in amounts less than a controlling stake. Affiliated firms are a representative office or branch of a larger enterprise. It is important to note that parent organizations manage the subsidiary. Relevant contracts are used as the basis for managing the representative office. Affiliation is one of the ways to expand the scope of activities for interdependent organizations. A similar method is used when opening subsidiary representative offices large companies operating all over the world.

Affiliated businesses are organizations that are managed by larger firms.

Variants such as “subsidiary” or “branches” can be used as synonyms for this term. The term “affiliation” appeared in the Russian dictionary in nineteen ninety-two and was borrowed from the English language.

The term in question is often used not only in relation to organizations, but also to individuals. Affiliates are those people who have a certain power of influence on the activities of business entities. This means that affiliated corporations can control the actions of organizations and individuals engaged in entrepreneurial activity. It should be noted that in foreign countries the term in question has a more “narrow specialization”. In Europe, affiliation means a controlled company. On the territory of the Russian Federation, affiliated business entities are not only branches, but also enterprises acting as a parent organization.

Article 105 of the Tax Code of the Russian Federation establishes the meaning of the concept of “affiliation”. It is necessary to pay attention to the fact that, according to current legislation, such companies are recognized as interrelated. Let's understand the meaning of the term in question based on practical examples from life.

Affiliated individual entrepreneurs and LLCs

The group of affiliated individual business firms includes objects that are included in the same category of persons as the owner of the individual entrepreneur. In the case when the owner of an individual entrepreneur owns twenty percent of the shares of another enterprise, the companies become interconnected with each other. This means that a person registered as an individual entrepreneur has the opportunity to control the work of a third-party enterprise.

An affiliated company is a controlled company, that is, the participating company is not completely free in its actions joint business

1. The only leader.
2. Persons included in the founders, supervisory or director boards.
3. Companies belonging to the same group as the main enterprise.
4. Persons who own twenty percent of shares or financial assets included in the authorized capital of the organization.

In addition, such companies are considered to be those where legal entities have at their disposal more than twenty percent of the securities or financial assets available in the authorized capital. This example is considered as a two-way affiliation. In the case where a legal entity belongs to an economic or industrial group, the management of this group acts as the parent organization.

In order to correctly understand the meaning of the term in question, you should understand the concept of “group of persons”. The meaning of this concept is enshrined in the Federal Law “On Protection of Competition”. The group of persons of individual entrepreneurship includes children and parents of a person conducting economic activity. This group also includes spouses, brothers and sisters of the head of the company.

Entities belonging to the “group of persons of a legal entity” are determined based on a number of criteria. The main one of these parameters is the sole management of the organization. In addition, this person must have the right to manage a subsidiary, which is obliged to carry out all orders of the parent organization. Persons belonging to the “group of persons of a legal entity” have at their disposal more than half of the securities or financial assets included in the authorized capital of the enterprise. According to the Federal Law, in this category includes persons whose decision selected the head of the enterprise.

It is important to note that the executive and supervisory boards consist of the same persons. The executive council includes the management and administration of the enterprise. The supervisory board includes persons on the board of directors and the foundation of the organization. Also, persons included in the category under consideration include those people at whose proposal the citizens who became members of the executive or supervisory board were selected.

An affiliated company is a company that is controlled by a larger parent organization.

Subtleties and nuances of the activities of interconnected organizations

When examining the question of what affiliated companies are, it is important to pay attention to some of the nuances of the activities of such enterprises. First of all, it should be said that the leading organization and its representative offices are connected by a single economic activity. It should be noted that all decisions are made only by the dominant company. In some cases, a meeting of the board of directors is allowed to discuss issues on the agenda. However, the main decision lies with the head of the parent company.

It should also be noted that, despite the above factors, responsibility for management actions rests with both parties. It is important to note that related companies are not responsible for the debts of branches or the parent organization.

Today, there are three main methods of managing a representative office. To manage the branch, select general manager, acting on the basis of an order from the parent company. It is important to note that all responsibility for the activities of the branch rests with the selected person. In addition, the selection of a branch director can be carried out through a collegial council. The third method of managing a representative office is to appoint a board meeting and a chairman of this board. The composition of the council consists of representatives of the branch and the parent company. Representatives of the parent company are appointed as the managing party.

The importance of information about affiliated enterprises

According to current legislation, enterprises registered as “CJSC” and “PJSC” are required to provide lists of affiliated organizations to the antimonopoly service. It should be noted that these reports are submitted not only to regulatory authorities, but also to persons included in the meeting of shareholders. One of the requirements of regulatory authorities is the mandatory recording of this information in accounting documentation.

Affiliated organizations are interconnected companies conducting common business activities. An agreement between similar enterprises in the field of pricing policy can help eliminate competitive organizations. Such actions are regarded as illegal, since they contribute to the formation of a monopoly in a certain area of ​​business activity. A monopoly can cause the paralysis of a particular niche of the commodity market on the territory of the Russian Federation. It is this aspect that explains the importance of control over interrelated enterprises by the antimonopoly service.

The concept of “affiliated company” also has synonyms that are closer to our ears, for example, branch or subsidiary

Below is a sample affiliate list report:

"Application

to the Procedure approved

by order of the Federal Antimonopoly Service

Russian Federation

(as amended by the Order of the Federal Antimonopoly Service

Russian Federation

List of affiliates

The full name of the business entity is recorded______________

For day, month, year (listing)

Location of the issuer: The address of the organization acting as an economic entity or group of persons authorized to act on behalf of the parent company without trust documents is indicated.”

Case Study

Next, we propose to consider an example of affiliated enterprises operating on the territory of the Russian Federation. In the example below, Philip Morris International (PMI) will be represented. This international organization specializes in the production of tobacco products. According to open data, the products of this company are available in stores in more than one hundred and eighty countries. As statistics show, the sphere of influence of this corporation is fifteen and a half percent of the world market.

On the territory of the Russian Federation, this company is represented by three interconnected organizations:

1. Philip Morris Sales and Marketing LLC.
2. CJSC Philip Morris Izhora is an enterprise located in the Leningrad region.
3. PJSC Philip Morris Kuban is an enterprise located in the Krasnodar region.

Representative offices of these enterprises are located in hundreds of Russian cities. More than five thousand workers work at the above enterprises.

Conclusion

From this article we can conclude that affiliation is an influence on the activities of a controlled organization. It is important to note that this term has several definitions. An affiliated company is considered not only a controlled organization, but also a parent company.

The concept of “affiliates” is most often found in corporate reports and in chronicles of economic crimes. Business optimization - and withdrawal of assets, company development - and fictitious transactions... Who are affiliates? How to identify them in other companies and how to keep records in your own?

Affiliated persons are all persons who, by their status, can influence management decisions in an organization or an individual entrepreneur. Influence means control over the development strategy of an enterprise, decision-making on mergers and acquisitions, major transactions (purchases or sales), management structure, etc.

The term “affiliation” comes from the English “affiliate” - “branch”, “branch”, “companion”, “joined”.

Legislation in Russia does not describe the affiliation of legal entities as clearly as in Western countries - in our country it is a broader concept. The Tax Code of the Russian Federation (Articles 20; 105.1 and 105.2) has the concept of interdependent persons. The RSFSR Law of March 22, 1991, No. 948-1 (Article 4), which is still in force, briefly lists affiliated persons and indicates the main signs of affiliation.

Signs of an affiliate

• Has the right to vote at meetings of shareholders of an OJSC or members of an LLC.
• Owns a block of shares that allows you to influence the decisions of the meeting of shareholders, or shares in the authorized capital. For example, PJSC Gazprom owns 100% of the shares of Gazprom Transgaz Ufa LLC and, in accordance with this, exercises direct control, being an affiliate for its Ufa subsidiary.
• Has family ties with managers/members of the board of directors/owners of the organization. David Traktovenko owns the St. Petersburg Banking House holding, and his son Vyacheslav is the chairman of the board of directors of the Mix cafeteria chain and the Fitness Formula chain of fitness clubs. The first in relation to the second is an affiliate.
• Has the right to cancel or suspend decisions of the company’s executive bodies (if the affiliated person is a member of the board).

Who can be an affiliate

Legal entities can be affiliated with both organizations and individuals. Their list includes:

• head of the executive body of a legal entity. For example, Vagit Alekperov, who formally owns 2.5% of Lukoil shares, is a person exercising the powers of the sole executive body of this company, and therefore affiliated;
• member of the board of directors, supervisory board or other collegial body of a legal entity. Gregor Mowat or Timothy Demchenko do not have shares in Magnit, but in 2018 they are members of its board of directors, and, accordingly, are recognized as affiliates;
• owners of more than 20% of shares or shares in the authorized capital. The Rosneftegaz company owns 50% of the shares of Rosneft PJSC and on this basis is an affiliate;
• a dependent organization in which this legal entity owns more than 20% (for example, a subsidiary);
• firms belonging to the same group of persons (more on this in the next chapter) as this company.

Individuals may be affiliated:

• in organizations in which these individuals control more than 20% of shares in the authorized capital;
• from other companies belonging to the same group as the individual.

What is an affiliate group

This term is taken from Law No. 135-FZ “On the Protection of Competition”. It can mean several options. So, the group of affiliates is:

1 Several enterprises belonging to one financial and industrial group. For example, the Kachkanarsky GOK, part of the EVRAZ company, belongs to a group of affiliates with Evrazruda, Yuzhkuzbassugol, Nizhny Tagil Iron and Steel Works and a dozen other legal entities.

2 Direct relatives (spouses, parents/adoptive parents, children, brothers and sisters) and legal entities belonging to them. For example, the Safmar holding is owned by Sait-Salam and Said Gutserievs. This is the brother and son of the owner of the RussNeft company, Mikhail Gutseriev. All their legal entities are included in the group of affiliates.

3 Legal or natural person and organizations in which the mentioned persons have more than 50% of shares or shares in the authorized capital. Affiliated companies can be either LLC or OJSC; this is not distinguished by law.

4 Individuals and companies in which this person is the sole manager (for example, general director).

5 Individual or legal person and organizations to which these persons have the right (based on constituent documents) give guidelines that are binding.

6 Several organizations whose board of directors includes more than 50% of the same people.

7 Individuals or legal entities and organizations whose general directors and/or more than 50% of the members of the board of directors are elected at the proposal of the mentioned persons. On this basis, for example, the Russian Helicopters company, the United Engine Corporation, the Moscow and Kazan helicopter plants and more than 10 legal entities belong to the same group.

The rights of affiliated persons are not established in any special way by law. They fully comply with the rights of other persons participating in the Russian economy. Dependent and controlling organizations and individuals have the right to conduct joint economic activities, coordinate their development strategies, but not go beyond the scope of antimonopoly norms and the requirements of anti-corruption legislation.

But affiliates have more responsibilities than other market participants. In specific legislative act they are not described, but stem from general meaning activities of a group of interconnected enterprises. These responsibilities are:

1 Inform counterparties about your affiliation with other persons in the event of interested party transactions (in this case, when one of the parties to the transaction is an affiliated or dependent person). Responsibility for violation of this requirement arises only in the case where the counterparty has proven that damage was caused to it by failure to provide information. The deal may be cancelled.

2 Inform about the emergence of affiliation in the event of acquiring more than 20% of shares or shares in the authorized capital of another person. This paragraph applies only to joint stock companies that are required to publish reports in accordance with the law. The affiliated company publishes information within 10 days in the official publisher of data on state registration of legal entities. The main difficulty is the control of subsidiaries and affiliates with regard to the sale and purchase of small blocks of shares by them (if this is permitted by the company’s Charter). If your subsidiary A acquires, say, a 10% stake in company B, and you already have a 10% stake in the same company B, then you, without knowing it, end up on the list of affiliates of the latter.

3 Maintain a list of affiliates. This obligation is more relevant for joint stock companies than for LLCs, but both should have a list. If a company places its shares on the stock exchange, it has an obligation to provide a list of affiliates to the Central Bank of the Russian Federation (as part of other reporting) and to the organizer of exchange trading. Also, these lists must be posted on the official websites of companies and be publicly available for at least 3 years from the date of posting and the same amount from the time of each update.

Who needs information about affiliates and why?

Information about the affiliation of companies and individuals must be available (see paragraph 3 of the next chapter) so that participants in transactions can check counterparties. The list of affiliated companies is necessary in order to control and report to government agencies on transactions with dependent parties, and not violate antitrust and anti-corruption laws.

It simplifies the procedure for approving interested party transactions (there is no need to obtain extracts from state registers to prove the interdependence of persons). This data is also provided to the LLC’s own shareholders/members. Another addressee is tax and other regulatory authorities during inspections (more about them in the chapter on the responsibility of affiliated persons).

Another important purpose of this information is internal control and protection against hostile takeovers. The simplest example is transactions to purchase stakes in competing companies. Let's say that CJSC First, which has 30% of the shares of OJSC Second, decided to purchase another 21% and obtain a controlling stake in this company. The “Second” is not eager to sell securities to the “First” and become completely dependent.

Then “First” applies the following scheme: “Tretiy” LLC is registered in the name of the son of the general director of JSC “First”, which comes out with an offer to buy a stake in the company “Second”. Since an individual cannot have affiliates, and an LLC has the right not to publish information about its affiliates, the interest of JSC First in the actions of LLC Tretiy can only be traced through the reporting of the company First.

Therefore, for the management of OJSC “Second”, when an offer to purchase shares is received, it is important to trace the possible affiliation of the potential buyer, assessing its likely connection with its main market competitors. And if this is not done, the shares will be bought by Tretiy LLC, and then sold to its affiliate, First CJSC, and a hostile takeover will occur.

How to properly maintain a list of affiliates

The procedure for accounting for affiliates for open and closed joint stock companies, as well as LLCs, is approximately the same.

1 The head of the legal entity issues an order in which he appoints the person responsible for maintaining the list. You can leave control to yourself, but it is more advisable to delegate this function to a lawyer.

2 The frequency of updating the list is set - once a year, every six months or every quarter, it all depends on the activity of the company and related parties in the stock market. This frequency is not specified by law.

3 The storage location of the list is established, as well as the period during which access to it is opened. If we're talking about about the LLC, the list can be kept by the general director and provided upon request. JSCs are required to post this data on their official website. Interested persons have the right to request the list for viewing: shareholders or members of an LLC, credit organizations.

4 The person authorized to sign the list is indicated.

The form of the list is chosen by the company itself. It must contain the following items:

• name of the company, its legal and postal addresses/full name and address for an individual;
• date of affiliation, event (purchase of shares, appointment to a position, etc.).

There may also be a column with the size of the share in the authorized capital owned by the affiliate and other information.

№	Complete brand name (name for non-profit organization) or last name, first name, patronymic (if any) of an affiliated person	Location of a legal entity or place of residence of an individual (indicated only with the consent of the individual)	The basis on which a person is recognized as an affiliate	Date from which the person is recognized as an affiliate	Share of participation of an affiliate in the authorized capital of a joint-stock company, %
9	Gref German Oskarovich	Russian Federation, Moscow	1. President, Chairman of the Board of the Bank 2. Chairman of the Board of the Bank 3. Member of the Bank's Supervisory Board 4. Belongs to the group of persons of the Bank	28.11.2007	0,003096

Here are some more examples:

What are the responsibilities of affiliates?

For violations in reporting affiliation, a person may incur several types of liability.

1 Responsibility for failure to provide information (including failure to provide it within the required time frame). If the company suffers damage due to the fault of an affiliate, it must be compensated by the culprit in full. Both the actual damage and lost profits are compensated.

2 Responsibility for the absence of a list of affiliated persons or its improper maintenance. Sanctions are provided for under Article 13.25 of the Code of Administrative Offenses of the Russian Federation: a fine for officials from 2500 to 5000 rubles, for a legal entity - from 200,000 to 300,000 rubles.

3 Responsibility for violation of requirements for interested party transactions. If information about a person's affiliation is not included in the appropriate list, is not published, or is deliberately withheld, this may be a reason for the cancellation of a transaction in which a special approval procedure has not been carried out.

4 Responsibility for violation of pricing. Sales of goods or services between related parties always attract close attention from tax authorities. An affiliate has every opportunity to influence the price to be sharply reduced or, conversely, increased compared to the market price. Therefore, such transactions are subject to additional checks, and if violations are detected, the affiliate is subject to fines proportional to the amounts underpaid/overpaid during the transaction.

Interdependent persons are checked using several methods:

• the prices used in the transaction are compared with market prices;
• the purchase price from an affiliate is compared with the price of subsequent sales to third-party consumers;
• the profitability usual for such transactions is compared with the profitability of a transaction between related parties;
• it is being examined whether part of the proceeds received from the transaction went to an affiliate;
• The reporting of both companies on expenses is assessed: whether one of them has excessive or, on the contrary, minimal expenses.

It is possible to appeal the tax authorities’ decision to collect, but you need strong evidence. For example, in arbitration court In the Volga District in 2016, a case was considered regarding allegedly reduced prices at which the company sold housing previously purchased at the market price to members of its board of directors. The decision to sell was made by the same members of the collective executive body. However, the company presented an internal regulation according to which the price of the apartment was set at a fixed amount more than 15 years ago and has not changed since then. The court ruled in favor of the defendant; the tax inspector's arguments were considered interference in the legitimate commercial activities of the company.

5 Responsibility for intentional withdrawal of assets from affiliated companies. Tax authorities identify such violations. The following are considered signs of withdrawal of assets from affiliates:

• a new legal entity was registered during a tax audit of an affiliated company;
• the new and old companies have the same actual addresses, telephone numbers, websites, and types of activities;
• the assets of the affiliated company decrease, and those of the new company grow in approximately the same proportion;
• employees of an affiliated company move to work for a new company;
• contracts executed for the previous company are reissued for the new one;
• using a new company as an intermediary in transactions with an affiliated company;
• transfer of brands, logos and other means of individualization from an affiliated company to a new company.

6 If there is one or more similar signs falling under clause 2 of Article 45 of the Tax Code of the Russian Federation, the tax authorities receive the right to collect from the new company tax debts attributed to the affiliated company.

Example :

In 2015, the Supreme Court of the Russian Federation considered an appeal (No. 306-KG) in the case of collecting arrears from a related party. The owner of the company registered a new legal entity on the eve of the tax audit. The name was the same as that of the person being checked, the type of activity was the same, the design of the official website was the same (the address differed only in the underscore), the employees were hastily transferred to a new company. The head of both companies was the same person. No affiliate information new company did not publish or officially inform contractors.

During the audit, it turned out that the proceeds from the sale of goods did not go to the original company, but to an intermediary, who turned out to be... a new company. There were no settlements with the affiliated company.

The court ruled that the activities of the new company were completely managed by the previous legal entity for the purpose of withdrawing assets and avoiding taxation. The original company was recognized as an affiliate, and both companies were recognized as interdependent.

Frequently Asked Questions

Affiliated and interdependent entities - what is the difference?

The interdependence of persons is a special case of affiliation. Used in the Tax Code of the Russian Federation to describe companies related by common owners/management, types of activities, etc. In the legislation, despite all the similarity of descriptions, there is some difference between affiliated and interdependent entities:

• An affiliate is a person who owns at least 20% of shares or shares in the authorized capital of another company; interdependent – ​​25%;
• companies in which the owners are not only parents, adoptive parents and children, but also guardians can be interdependent;
• A company can recognize itself as interdependent voluntarily, and affiliated only based on objective criteria.

I am the CEO of a company on the verge of bankruptcy. To pay off the next tax payment, he bought two cars from his company - at a price below the market, but they would have been sold at a bankruptcy auction for even less. Can tax office cancel the deal or charge me the cost of the cars because I am an affiliate?

Even before 2016, such a transaction could only be canceled as part of a bankruptcy procedure and only if the sale amount was significantly underestimated compared to the market price. However, from November 30, 2016, article 45 Tax Code Changes have been made according to which tax liability for a defaulting company is borne not only by legal entities, but also by individuals. Accordingly, if taxes are not paid on time in the next tax period, your transaction may be considered an attempt to withdraw property for the benefit of an affiliate. And they will oblige you to reimburse market value cars - this amount will go towards paying taxes.

I individual entrepreneur, his wife is the owner of a 25% stake in a large company. I won a commercial tender and became a supplier to my wife’s company. Will the transactions fall under the relationship of interdependent persons, since I was not given any preferences?

Yes, such transactions come under the close attention of the tax authorities, since in this case the spouse’s company is considered an affiliate of the individual entrepreneur (belongs to the same group of persons). The transactions are considered commercial transactions between related parties. The circumstances of the tender, its conditions and the final price will be examined. The cost of the contract will be compared with similar ones on the market average. If the firm is in financial distress, any sales to a related party may be considered a potential divestment.

Conclusion

An affiliate is a person or organization that can legally influence the activities of other firms. Determine their development strategy, distribute dividends, and appoint management.

Affiliated persons can be general directors and members of the boards of directors of companies, owners of blocks of shares of 20% or more, and subsidiaries. Another category of affiliation is belonging to the same group of persons. A group of affiliated persons refers to enterprises that are part of the same financial and industrial group; companies owned by relatives; legal entities managed by the same person; companies that are actually managed by one legal entity.

Companies with affiliated or dependent persons are required to keep records of them, updating the lists quarterly.

Information about affiliates is used by other companies to avoid breaking the law when executing interested party transactions. This information is also requested by the tax office when checking transactions between dependent and affiliated persons.

Failure to provide information about affiliation may be fraught with fines, as well as cancellation of the transaction with compensation for damage and lost profits. In the event of a deliberate transfer of assets from an affiliate to a dependent entity and an attempt at fictitious bankruptcy, the tax inspectorate has the right to collect arrears from the dependent company without acceptance (automatically without the consent of the person).

Video for dessert: A school of salmon crosses the road

What is an affiliated company, why are such companies created? Ways to manage an affiliated company Nowadays, the word “affiliated” has often become used with the meaning of some kind of fraud or fraudulent activity. Meanwhile, the concept affiliated company" has many more meanings, and they are completely neutral.

What's happened affiliated company

To put it simply in simple language, then this is a company that is subordinate to another, larger one; in Russian there is the word “subsidiary” for this. Both companies - large, main and subsidiary, that is, affiliated, are interconnected by economic interests, they have property relations, they influence each other.

The parent company controls the work affiliated company that is, the latter is not free in its actions and depends on the activities and cooperation with the main company. The most common way to create affiliated company- is to transfer to her ownership less than 50 percent of the shares of the main company.

There may be an option when both companies cross-hold shares in each other, but one has a larger stake than the other and, therefore, the one that owns a smaller stake in the other company is relative to the first affiliated company.

Why are they created? affiliated companies

Such companies are created during expansion and development; in addition, they help optimize the tax base and improve business management. For example, while developing, the parent company begins to work in several directions. In this case, it is logical to create affiliated company and transfer one of the areas to her, but at the same time control her activities, transferring her a block of shares.

Reason for creation affiliated company may become an expansion of the parent company geographically. In this case, in order not to create a branch in another city, for simplification the management creates affiliated company which performs the functions of a branch.

Both companies are united by common economic activities, but the main one retains the final say. Advantage of creation affiliated company is that the parent company is not responsible for the debts of its “daughter”, just as the “daughter” is not responsible for the debts of the main company.

Ways to lead affiliated company

When a subsidiary is created, it is necessary to immediately determine how its management will be organized; the efficiency of economic activity depends on this affiliated company. The most common method of management is the appointment of a general director, who alone makes all decisions and manages the company’s property in the amount of a quarter of all material assets, which are on the balance sheet of the subsidiary.

The General Director is personally responsible for the decisions he makes. The second method involves collegiality: a board of directors is created affiliated company led by a chairman, and all issues are resolved through joint efforts.

The third method involves guidance affiliated company through a management organization, either the parent company itself or an organization specially created for this purpose.

To create affiliated company It is always necessary to take into account all the pros and cons of the options, and it is better to involve specialist lawyers for this.

Editor: Igor Reshetov

The institution of affiliated persons is a fairly new phenomenon, both theoretically and practically. The article reveals the definition itself and the scope of its application.

Attention will also be paid to the accounting rules of this category, responsibility for non-compliance with them, as well as the relationship between the main and subsidiary organizations.

Affiliates. Concept and types

The phrase itself arose in the Russian language in the 90s. The concept of an affiliate was first mentioned in 1992 in an appendix to the Decree of the President of the Russian Federation. It talked about investment funds. In a broad sense, affiliation implies closeness to something, because English verb to affiliate, from which the word comes, is used in the meaning “to join, connect.”

This term can also be interpreted as joining a membership. Affiliated persons, to one degree or another, influence each other, whether in business or economic activity. In total they represent a specific group.

This term found legislative reflection in 1995, and the official definition appeared only in 1998 as a result of amendments to the Competition Law. Affiliates are citizens or entrepreneurs who can influence the business activities of other people or companies. There are some aspects in which an entity is considered to have control over an organization. Affiliated persons of OJSC are citizens or entrepreneurs:

• Having more than 20% of voting shares. At the same time, affiliates of the Joint Stock Company have the opportunity to influence the decision-making process in this organization.
• Having more than 50% of voting shares.

It is believed that an individual can have a significant impact on an organization, having the ability to participate in decision making without even having control over its activities.

Legislative framework

Article 4 of the Federal Law, as stated above, defines what affiliated persons are. In addition, the normative act also deciphers the possible composition of this category. The list of affiliates primarily includes entities closely related to the control mechanism.

These may include holders of a large block of voting shares, direct participants in the enterprise management process. Affiliation usually implies the possibility of unilateral influence of one side of economic activity on another.

It should be emphasized that this refers to relationships that are not of a property nature, but of a managerial nature. Property dependence can, rather, be defined as a consequence, and not at all a condition for the emergence of dependence on control. Relationships of a related nature play an important role in this matter.

Classification

According to the Competition Law, affiliates may be:

1. Enterprises:

One of the owners of this legal entity;

Member of any management body (for example, board of directors);

Persons who have at their disposal at least 20% of the total number of decisive shares;

An organization in which the subject in question acquires the right to control the number of votes exceeding 20% ​​of the total;

The party exercising the powers of the sole body.

2. An individual conducting business activities:

Citizens who belong to the same group as the subject;

An organization in which the entrepreneur in question has the right to control 20% or more of the total number of votes expressed by decisive shares, contributions, shares in the authorized capital.

3. Entrepreneurs participating in financial and industrial groups:

Members of supervisory bodies or boards of directors;

Collegial management structures;

Entities that exercise the powers of individual divisions of the group.

Scope of this category

The category of affiliated persons can often be found not only in the theoretical, but also in the practical part of the activities of entrepreneurs. Meanwhile, as practice shows, many do not have a clear idea of ​​this category. This, in turn, often becomes the cause of quite serious errors in the process of economic activity of the subject. The term "affiliates" is primarily associated with corporate law. Most often it is used for:

• the process of identifying persons who obviously have an interest in the actions of the company, which presumably will lead to the conclusion of a transaction;
• identification of directors who have the right to cast a decisive vote in relation to the transaction of interest to them, which the public intends to carry out joint stock company with over a thousand participants;
• determining the list of entities about which the business company must be provided with information;
• the process of identifying persons, the provision of information about whom the joint-stock company is obliged to provide;
• determining the list of participants who have overcome the thirty percent mark during the acquisition of shares of the OJSC; in this case, certain procedures must be followed, the course of which is regulated by law.

Relationships between the parent company and its subsidiary

How do affiliates interact? An example of such relationships can be considered by taking the dominant (main) society and the subsidiary (dependent on the main one). When creating the latter, the company receives ample opportunities to increase the volume of its activities. The main difference between the main company and its branches is legal independence.

Responsibilities

Affiliates have more than just rights and opportunities. By virtue of their status, they have a number of responsibilities. First of all, they are charged with informing society about the shares they own. This must be done in in writing and indicating the agreed details (exact quantity, types of papers, etc.).

Information must be received within a certain period from the moment of acquisition of shares. Despite the fact that there is no provision for the liability of such persons before the law in connection with failure to provide the necessary information within the allotted time, certain sanctions against them still exist.

If, due to the fault of affiliated persons, the joint-stock company suffered losses of any nature (for example, property damage), then the punishment will be compensation for the entire amount of damage caused (in accordance with Article 15 of the Civil Code of the Russian Federation).

Accounting responsibilities of enterprises

The company is required to maintain a list of affiliates. The list must be submitted to the relevant authorities responsible for regulating this market. Antimonopoly legislation imposes a fine for violation existing rules providing the necessary information. The same rules apply to the list of LLC affiliates. Lists should be publicly posted on the Internet.

Such requirements are quite understandable. Such information is in great demand within the framework of a certain procedure for concluding transactions in which affiliates participate. These include, in particular, interested party agreements. A logical question arises: “Is a closed joint stock company obliged to submit information about affiliated persons?”

After all, it, as a rule, does not engage in public placement of securities. Accordingly, the rule concerning open joint-stock companies does not fully apply to closed joint-stock companies. Nevertheless, his responsibilities include maintaining records of the subjects in question, albeit in a free form. If a closed joint stock company carries out a public placement of bonds, then it is also obliged to publish the register of affiliated persons on its website on the Internet.

Accounting procedure

If we take any example of a list of affiliates, the list will contain the following information:

1. Company name (short and full), postal address.

2. Last name and initials of the subject, residential address (for individuals);

3. Grounds for being an influential party, the date of occurrence of these grounds.

Responsibility

There are different types penalties for violating the prescribed order.

1. Administrative responsibility. It occurs if the information is not provided in full or in violation of the deadlines specified in the legislation.

2. Tax liability. It occurs in relation to interdependent persons and concerns unreasonable price adjustments that run counter to the real situation on the market. If, based on the results of the audit, it turns out that the cost of the transaction deviates from the existing one by trading platform more than 20%, this fact gives the controlling authority the right to charge additional taxes and penalties. In this case, collection is carried out without acceptance.

3. Violation of the procedure for carrying out transactions in which affiliates are participants may also be subject to civil liability.

Hello! In this article, you will learn who affiliates are, what rights they have, and how to compile and store a list of such data.

Today we will look at:

• What is included in the concept of “affiliates”;
• What characteristics do they have?
• Why do companies need to maintain a detailed list of affiliates?

Main characteristics of affiliates

The term is increasingly found in economic publications, articles on finance and entrepreneurship.

Affiliates - these are legal or individuals that can affect the work of joint-stock companies or private entrepreneurs. They have the opportunity to control the operation of the enterprise and the adoption of important decisions by management.

The name comes from English word"affiliate", which means to attach something. In simple words, affiliation is the exertion by a person of influence on the work of a company, which implies property and organizational relations between them. And the affiliation procedure means that one enterprise or company is included in the structure of another without changes in the management team.

In domestic practice, the main distinguishing features of affiliation are not only the ability to intervene and influence business activities, but also dependent relationships.

They appear:

• If a person has the right to vote at all meetings;
• If it has a share in , a certain percentage of shares;
• There are family ties between members of the board or in the concern;
• If an affiliated person by status (CEO or Chairman of the Board) can suspend lower-level decisions.

For enterprises, employees who can influence work through strikes or demands to change are not considered interdependent. wages, cancel the deal. But the owner's son, who runs a subsidiary and wants to enter into a promising deal, is already an affiliate.

In any case, the relationship not only takes on a managerial nature, but also affects the distribution of property. The main problem is the possibility of collusion, which will lead to the creation of a monopoly relationship. This is harmful to the economy and creates a serious imbalance in the industry, so affiliates and their transactions are under the systematic control of the state antimonopoly committee.

Who is included in the list for a legal entity

Such a dependence may occur:

• With shareholders who own at least 20% of the company’s shares;
• With the supervisory board or owners, with members of the management board or board of directors;
• With other enterprises belonging to the same concern or trading group;
• With enterprises in which this legal entity one fifth belongs authorized capital or at least 20% of the votes.

For a company, an affiliate can be either a legal entity or an individual. It has the right to control or manage it: officials of various ranks, founders of the enterprise and large investors. In European legislation, only dependent companies and joint stock companies are referred to as such. In domestic – all participants in the relationship, including subsidiaries and individuals.

List of groups with an affiliated person in their composition

When listing related parties for a commercial company or joint stock company, a group is often mentioned in which they may belong in parallel with the affiliate.

The main signs of the presence of such a person in a group:

• It solely controls and manages the entire company;
• Has a controlling stake of voting shares or the largest share in the authorized capital;
• On his recommendation or direct order, key positions in the firm were appointed;
• It influences and approves candidates for the supervisory board;
• The enterprise indicates the powers of the parent company, which allow the cancellation or adoption of important decisions;
• The supervisory board and the management board of a commercial company consist of the same people.

All members of the group can intersect with each other, collaborate or carry out common transactions. A simple example The formation of an affiliated group is a joint-stock company with subsidiaries: many founders actively invest in the expansion and creation of branches, and develop regional areas. They are called “affiliate networks”.

Duties and responsibilities of affiliates

Interdependent legal entities and individuals have certain rights and restrictions. They are required to conduct transactions according to certain regulations, informing commercial companies about their affiliation. This adds post-accrual checks and post-profit tax payments.

The liability of affiliated persons may be:

• Legal for failure to comply with the requirements for conducting a transaction;
• Administrative for untimely or incomplete provision of information, a list of interdependent persons;
• Tax authorities for artificially lowering or inflating prices.

The law does not explicitly state the rights of affiliates. But they stem from their position in the group or with other participants in economic relations. They must conduct business in strict compliance with anti-corruption laws.

How and why to keep a list

For everyone joint-stock enterprises maintaining a list containing information about affiliates is mandatory. It is updated every quarter based on recommendations for changes that have occurred. For the company, it is a documented basis for entering into transactions with interdependent companies.

• Download the LLC affiliate list form

Basic positive points from maintaining the register:

• Ensures the safety of capital in the company by reducing the possibility of interference by outsiders in the operation of the enterprise;
• Reduces to a minimum the risk of recognizing the concluded agreement as invalid due to disapproval of the transaction by influential members of the supervisory board;
• Simplify the procedure for approving and concluding a transaction in which there is a certain interest.

Companies that publicly place shares on the stock market are required not only to maintain lists of affiliated persons, but also to periodically publish them on the Internet. They must be available to shareholders and other users for at least 3 years.

All lists must contain information:

• The date on which it is drawn up;
• Taxpayer identification number;
• All information about the company;
• Legal address;
• The percentage of shares or share in the authorized capital controlled by an affiliate.

In large companies, an authorized person may be designated who will be responsible for storing and compiling the list: the chairman of the board or corporate secretary, the registrar of the joint stock company.

The data is periodically studied by the antimonopoly service to identify cases of collusion and illegal transactions. Lists are often required by banks when considering a loan application, government agencies or their own shareholders, and tax authorities when checking reporting documentation.