# Associate Company [Section 2(6)]
## Definition
In relation to another company, an associate company means a company in which that other company has significant influence, but which is not a subsidiary of the company having such influence, and includes a joint venture company.
## Key Element: 'Significant Influence'
Significant influence means EITHER:
- Control of at least 20% of the total voting power, OR
- Control of or participation in business decisions under an agreement.
Note: The threshold is 'at least 20%' (i.e., 20% or more), not 'more than 20%'.
## Key Element: 'Joint Venture'
A joint venture means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
## Important Distinction
| Relationship | Voting Power |
|---|---|
| Subsidiary | More than 50% (i.e., >50%) |
| Associate | At least 20% but not making it a subsidiary |
- An associate is NOT a subsidiary — if the other company controls Board composition or >50% voting power, it becomes a subsidiary, not an associate.
- This is a new definition inserted by the Companies Act, 2013 (no equivalent under 1956 Act).