related company
Definition
A related company is a business that has a significant connection to another business, usually through shared ownership or control. For example, if one person or group owns or controls two different businesses, those businesses are considered related companies to each other.
Example
If you own 60% of a bakery and also 60% of a coffee shop, those two businesses are related companies because the same owner controls both of them.
Watch Out
Contracts, loans, and tax rules often treat transactions between related companies differently than deals between strangers, so you may face extra scrutiny or restrictions when doing business with a company you also own or control.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.