affiliated entities
Definition
Affiliated entities are companies or organizations that have a meaningful ownership or control relationship with each other, such as a parent company and its subsidiaries or two businesses owned by the same person. Think of them as businesses in the same family tree. Courts and contracts treat affiliated entities differently than completely separate businesses because the people or money behind them are connected.
Example
If you own both a bakery LLC and a catering LLC, those two businesses are affiliated entities because you control both of them. A contract with one business might extend rights or obligations to the other if the agreement includes language covering affiliates.
Watch Out
Watch out for contracts that grant rights or impose restrictions on your affiliated entities, because signing one agreement could unknowingly bind all the businesses you own.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.