In order to properly differentiate between an affiliate and a subsidiary, we must understand what the two terms stand for. A subsidiary is a company owned by a holding company or a parent company in which a major share of its stocks is owned or controlled by the parent company. At times, all the stocks of a subsidiary can be controlled by the parent company.
In contrast, just a little percentage of the total stocks an affiliate company is being controlled by the parent company. For instance, let's assume Company A is the parent company and has 70 percent, 60 percent, 40 percent stakes on company B, C, and D, respectively.
The daughter companies B, C, and D, can be regarded as subsidiaries and affiliates, but companies B and C are qualified to be called subsidiaries of company A, while Company D is an affiliate company to company A since only a small portion of its stocks is owned by the parent company.