Inter company borrowing
This query is : Resolved
28 January 2026
Please give me clarity whether a pvt ltd company can take loan from his sister company. Is it necessary to give back full amount to the sister company at the end of the year.
Please sort our mu confusion.
Prakash Menon
Accountant
Please sort our mu confusion.
Prakash Menon
Accountant
29 January 2026
A private limited company can borrow from its sister company without any restriction on year-end repayment. The loan must comply with Section 186 of the Companies Act, require board approval, be interest-bearing at or above G-Sec rates, and stay within prescribed limits or obtain shareholder approval if exceeded.
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