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What does vehicle affiliation mean?

1 Answers

DeReid

09/04/25 8:33am

Affiliation operation refers to a phenomenon where the affiliated party conducts business activities in the name of the affiliated entity. For convenience in transportation operations, vehicles are registered under the name of a unit with transportation operation rights, and operations are conducted under the unit's name. The affiliated party pays a certain management fee to the affiliated unit. In practice, there are two types of affiliation operations: substantive and formal. 1. Substantive affiliation operation: The affiliated party purchases the transportation tools with their own funds, engages in transportation services under the name of the affiliated entity, and pays a certain management fee to the affiliated entity. 2. Formal affiliation operation: The affiliated party engages in transportation services under the name of the affiliated entity and pays a certain management fee to the affiliated entity. The affiliated entity does not provide any services or management to the affiliated party. This type of affiliation operation is common in the road freight transportation industry. The characteristics of affiliation operation are: (1) The four certificates of the affiliated party are unified, i.e., the vehicle registration certificate, road transport permit, driver's license, and professional qualification certificate for commercial road transport drivers (four certificates) all bear the name of the affiliated entity as the owner, operator, unit, and service unit; there exists a nominal owner and an actual owner. (2) The affiliated party pays a management fee to the affiliated entity; nominally, the owner does not participate in operations or receive profits. (3) Both parties sign a contract or internal agreement related to transportation operations.

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