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The Intercompany Loan Agreement is a crucial document used when one company within a corporate group provides financial assistance to another group company. This agreement is particularly important in the Indian context where such transactions must comply with specific provisions of the Companies Act 2013, especially Section 186 regarding inter-corporate loans, and transfer pricing regulations under the Income Tax Act. The document is typically used for business expansion, working capital requirements, or project financing within group structures. It must address RBI guidelines, stamp duty requirements, and include appropriate interest rates that meet arm's length standards. The agreement should be tailored to reflect the relationship between the parties while maintaining necessary formality for regulatory compliance and audit purposes.

1. Parties: Identifies the lender and borrower companies, including their registration details and registered offices

2. Background: Sets out the context of the loan, relationship between the parties, and purpose of the facility

3. Definitions and Interpretation: Defines key terms used in the agreement and establishes interpretation rules

4. The Facility: Details the loan amount, purpose, and conditions precedent to drawdown

5. Interest: Specifies interest rate, calculation method, and payment periods

6. Repayment: Sets out repayment schedule, prepayment terms, and payment mechanics

7. Representations and Warranties: Standard corporate representations including authority, capacity, and solvency

8. Covenants: Both positive and negative undertakings by the borrower

9. Events of Default: Lists circumstances constituting default and consequences

10. Taxes and Stamp Duty: Addresses tax implications and responsibility for stamp duty payment

11. Notices: Specifies how formal communications between parties should be made

12. Governing Law and Jurisdiction: Confirms Indian law as governing law and specifies jurisdiction for disputes

13. Counterparts: Allows execution in multiple counterparts if needed