What is the SEC definition of an affiliate?
The term “affiliate” is defined in Rule 405 under the Act as a “person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with,” an issuer.
Who is considered an affiliated person?
A person who is in a position to influence a firm’s management decisions. Affiliated persons usually include directors, officers, owners of more than 10% of the firm’s outstanding stock, and family members or close associates of these groups. Also called control person.
Are all employees affiliates?
Related Definitions Employee Affiliate means any person employed by (or who is the spouse, relative or relative of a spouse, in each case residing in the home of a person employed by) a Control Affiliate. Employee Affiliate means any Person directly or indirectly controlled by Employee.
What does affiliate under common control mean?
“Affiliate” means (a) any Person that directly or indirectly controls, is controlled by, or is under common control with the Person in question, (b) any Person directly or indirectly owning, controlling or holding with power to vote twenty percent (20%) or more of the outstanding voting securities of another Person, (c …
What is an affiliate legal definition?
The legal definition of “affiliate” applies to business and retail relationships. Affiliates are organizations, individual persons, or business concerns that are controlled by a third party or each other. Affiliates often have the following: Shared management or ownership.
Is a director an affiliate of a company?
Directors, officers and holders of ten percent or more of an issuing company’s voting securities (including securities which are issuable within the next sixty days) are deemed to be affiliates of the issuing company.
Is a director an affiliate?
Can a person be an affiliate of a company?
An affiliated person is someone in a position to influence the actions of a corporation. Affiliated persons often have access to inside information; consequently, their transactions are more carefully regulated.
What does Affiliates mean legally?
How do you determine if a company is an affiliate?
Companies are affiliated when one company is a minority shareholder of another. In most cases, the parent company will own less than a 50% interest in its affiliated company. Two companies may also be affiliated if they are controlled by a separate third party.
Can a person be an affiliate?
In bankruptcy proceedings, affiliated persons are anyone who owns or controls any part of a company. Affiliated persons who own 20% of the company or more or have voting power equal to that percentage are considered affiliates. 3 In other words, an affiliate is a company or individual that owns 20% of a company.
What is an affiliate of an entity?
An affiliated entity is an organization that directly or indirectly controls another entity, or is directly or indirectly controlled by another entity, or which is under common control alongside another entity. Thus, an affiliated entity could be a parent company or a subsidiary company.
Who are the affiliates of an issuing company?
Explanation of Affiliates. Rule 144 at (a)(1) defines an “affiliate” of an issuing company as a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such issuer.” Directors, officers and holders of ten percent or more of an issuing company’s voting securities…
What does SEC comment about ” affiliate ” stockholder in public float?
In monitoring SEC comment letters, we came across this SEC comment letter made public this month. It serves as a reminder to registrants that, when calculating a company’s public float, there is an informal presumption that a 10% or greater stockholder is an affiliate of the company; however, this presumption is rebuttable by the registrant.
Who is an affiliate under the Securities Act of 1933?
The term “affiliate” is defined in Rule 405 under the Securities Act of 1933, as amended (the “ Securities Act ”), as a “person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with,” an issuer.
Can a sister company be considered an affiliate?
Note: The Final Release clarifies that auditors lacking the requisite information to determine whether a sister company is material to the controlling entity should conclude that such sister company is an Affiliate. The SEC neither proposed nor adopted changes to the general standard (Rule 2-01 (b)).