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Inter company borrowing

This query is : Resolved 
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(Querist)
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
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Aashok Kumar Sharma online

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Aashok Kumar Sharma online (Expert)
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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