Loans between affiliated companies are generally legal. According to the Provisions of the Supreme People's Court on Several Issues Concerning the Applicable Law in the Trial of Private Lending Cases and the provisions of Articles 146, 153 and 154 of the Civil Code of People's Republic of China (PRC), the private lending contracts concluded between affiliated companies are necessary for production and operation, and the parties claim that the private lending contracts are valid. However, the loan contract is invalid under the following circumstances: (1) obtaining credit funds from financial institutions and lending them to borrowers at high interest rates, and the borrowers know or should know in advance; (2) The borrower knows or should know in advance that the funds obtained by borrowing from other enterprises or raising funds from employees of the unit are lent to the borrower for profit; (3) The lender knows in advance or should know that the borrower is still providing loans for illegal and criminal activities; (4) Violating public order and good customs; (five) other violations of the mandatory provisions of laws and administrative regulations. (6) There is a false expression of intention when signing a loan contract. (7) Lenders and borrowers collude in bad faith, which damages the legitimate rights and interests of others.

Legal objectivity:

Article 667 of the Civil Law of People's Republic of China (PRC) is a loan contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest. Article 668 of the Civil Code of People's Republic of China (PRC) A loan contract shall be in written form, unless otherwise agreed between natural persons. The contents of a loan contract generally include terms such as loan type, currency, purpose, amount, interest rate, term and repayment method.