When you keep an iron nail next to a magnet, after some time, the nail starts exhibiting magnetism. If you pour hot water on ice, after some time the ice melts and the water becomes cold. Mythology speaks of Parasmani, the magical stone, the touch of which changes everything to gold. A rotten fruit causes all other fruits in the basket to rot. The case of human beings is no different. An English proverb says that a man is known by the company he keeps. When two people spend a lot of time together, after some time they start becoming like each other.
This happens because in every interaction that we have – with a person, animal, plant or thing -- there occurs an exchange of prana, breath. In the realm of ether and to a clairvoyant eye, this is visible as change in colour of the aura – yellow interacts with blue to become green; the same yellow when it interacts with black, becomes brown. That is why our ancestors emphasised the importance of satsang or good company, the company of evolved beings.
Our puranas are replete with examples of satsang. Constant company of Mantara, the devious housemaid, diluted the thought process of the just Queen Kaikeyi, who, under her influence, demanded King Dasarata to send Prince Rama to the forest in exile. An Ayurveda story says rishis who came down from the higher reaches to settle in plains, began to age owing to interaction with their new neighbours and environment. Likewise there are instances of evolution of beings in the company of evolved gurus and others. Ahalya transformed from stone to woman, by the mere touch of Rama and got salvation. Arjuna received Gitagyan in the company of Krishna and he won the battle.
Satsang basically means being in the company of sat, truth. Company of falsehood always leads to destruction of body and soul. Satsang need not necessarily be with a person or with people. It could also mean vedic chanting, that emit phenomenal positive energy, or it could also mean reading sermons of evolved beings. For instance a simple kriya detailed in the shastras is Sanatan Kriya that can be learnt from an evolved guru so that you can upgrade yourself in your striving to attain to higher stages of evolvement. There is the positive effect of subtle energy when you remain in the company of the learned.
On the other hand, kusang or negative company does the opposite of what a satsang would do. If satsang is 'tamso ma jyotirgamaya,' – spreading of light -- kusang is 'jyotirma tamso gamaya' or in other words instead of going from darkness to light by satsang, you are asking the Divine Mother to go from light to darkness by kusang.
A good indication of whether you are in satsang or kusang is by observing your action tendency. If you find that you are doing charitable acts, spiritual acts, going deeper into meditation, avoiding alcohol and parties, then the energy you are with is definitely satsang. And if the opposite of this is happening, if you turn your face from an injured animal, if your actions are causing harm to environment, if you are immersing yourself in grosser pleasures and if your time for meditation is reducing, then it is kusang. Never let anyone else judge you, always let your experience and the course your life takes, judge you.