Associate Company

This query is : Resolved 

02 November 2009

Dear All,

Please let me know the meaning of Associate Company. Is it covered under company law.

CA. Aryendra (Expert)
02 November 2009

As per "Accounting Standard 23" Accounting for Investments in Associates in Consolidated Financial Statements
An associate is an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture of the investor.

Common Meaning
Enterprise over which another enterprise exercises a degree of control which is less than the degree of control exercised over a subsidiary. In accounting, such control is typically taken to mean the ownership of at least 20 percent of voting shares, and some say in the management of the associate enterprises. Associated companies usually have interlocking directorates to ensure they have common policies and complementary objectives.

Ankur Garg (Expert)
03 November 2009

I don't think it covered under company law.

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