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Companies Act- Section 2(6)- Associate Company

Review of the definition - Associate Company

ASSOCIATE COMPANY
Section 2 Subsection (6) “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.

Explanation.—For the purposes of this clause, “significant influence” means control of at least  twenty per cent. of total share capital, or of business decisions under an agreement;

My review on 2(6)
On careful reading of the said section, we can clearly draw that the coverage of the sections and its applicability has becoming wider by inserting the term " Associate company" . When we are studying the said sections following important aspects will pop up to our attention

A company will be treated as an Associate company of another company, if the former is having

(1) atleast 20% of the total share capital of the later ;
                                           OR
(2) having influence over the later's decision making process under and agreement
                                           OR
(3)  Both are Joint venture companies

By inserting this section many of the sections will become applicable for transactions with Associate companies also and care should be taken by the management/board of directors while having transactions with such companies.