What Is an affiliate ?
An affiliate, in general clientele terms, is an “ official attachment ” of one business entity to another. official attachment implies a narrow or agreement of some kind and an announcement to the populace of the connection between the two businesses. Whether one business is an affiliate of another is based on common ownership, common management, and the universe of a contract.
The SBA says that an individual, entity, or commercial enterprise ( Business A ) is an affiliate of another business ( Business B ) if Business B has control over Business A, based on one of several factors. The SBA considers factors like possession, management, previous relationships with or ties to another clientele, and contractional relationships.
In accession, parties to a joint venture may be considered affiliates of each other in certain circumstances.
The term “ affiliate ” has two specific uses in occupation context :
In corporate law and taxes, an affiliate is a company that is related to another company, normally by being in the position of a member or a subordinate function, a subsidiary company .
In on-line retailing, affiliation is common in marketing and selling wherein one party may affiliate with another to sell products or services. The seller has a web site on which affiliates may sell products. The seller has control over the site and pays a perpetration to affiliates. This kinship is sometimes called “ affiliate market. ”
In broadcast medium, local anesthetic television and radio stations are affiliates of a national network. These local stations are locally owned, but they use network content and advertise.
Affiliates as freelancer Contractors
An consort is normally not part of the ship’s company with whom it affiliates. It ‘s a break ship’s company, an independent contractile organ. While another a company may affiliate through ownership, that ownership does n’t mean total control .
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Affiliate marketing is an arrangement between a seller and another commercial enterprise that gives a sales perpetration to the affiliate for promoting a product or line of products for the other company. Amazon affiliate programs are an model of this type of marketing.
Amazon ‘s Associate Program Operating Agreement clearly identifies Amazon and the Associate as independent contractors.
consort agreements can be entered into by any character of clientele, from lone owner to pot. Affiliating with another caller is a good room to promote your business and make more money by joining with person who has a prove track record and a larger customer base. But before you join an affiliate plan of any kind, consider these questions ( from Leslie Truex, Home Business adept ) .
An affiliate agreement is a contract between the two parties : the server or offer business and the affiliate. Like any other type of contract or agreement, it ‘s important to put this affiliate agreement in write .
Parts of an Affiliate agreement
An consort agreement contract should include answers to the surveil questions :
- What is the term of the affiliate agreement? Under what circumstances can either party terminate the agreement?
- What is the definition of “affiliate” in this situation?
- What is the relationship between the parties? Are they both independent?
- What are the rights and duties of the affiliate? Of the company?
- Who pays what to whom and when?
- What licenses are required of both the affiliate and the host business? Who owns the licenses? For example, a broadcast TV station must have a specific type of license, and keep that license up to date.
- Who owns the intellectual property? (Trademarks and service marks are the most common types of intellectual property in affiliate agreements.) What are the restrictions on the use of intellectual property by the affiliate?
- How are affiliate payments made and when? How can commissions be re-negotiated?
- What state law governs this agreement?
- What happens if either of the parties goes out of business?
- What happens if either party defaults on the agreement?
Standard Contract Language You Should Know About
If you are reviewing an affiliate agreement, you MIGHT see some early standard sign terminology. Three standard clauses you may see are :
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- A confidentiality/non-disclosure clause that keeps the affiliate from sharing proprietary business details with others.
- An indemnification clause (sometimes referred to as a “hold harmless” clause) that protects either party from harm for the actions of the other party.
- Mandatory arbitration is becoming a standard part of many business contracts. This clause requires the parties to use arbitration in a legal dispute, rather than the court process of litigation.
This article includes a general overview of types of affiliates and agreements. Every business situation is unique, so be sure to get help from an attorney in preparing any affiliate agreement. There may be “gotcha” clauses or language that you may not have seen or included. For example, if you are the affiliate, check to see what percentage of ownership, if any, the other company has in your business.
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