The most correct or accepted definition of associated company is one that defines it as a company in which another company (called the parent company) owns a stake.
However, the actual definition can vary infinitely depending on the country, the applicable legality or even, as the concept of is used.
A partner company can be owned (in part) by another company or group of companies. As a general rule, the parent company or companies do not usually consolidate the financial statements of the associated company (as it usually happens in the case of a subsidiary).
Difference between subsidiary company and associated company
The main difference between a subsidiary and an associated company lies in the percentage that the parent company owns. If in a subsidiary, the participation is majority, in an associated company the amount it owns will be minority.
As a general rule, the parent company records the value of the associated company in its balance as an asset.