TLDR:
Sister companies are companies owned by the same parent company but that operate independently of each other, sharing a common ownership structure without direct control over one another.
Sister Companies in Practice
Sister company relationships are common in large conglomerates where a parent company manages multiple distinct businesses that may share resources, supply chains, or distribution networks while maintaining separate corporate identities and management. Understanding whether two companies are sisters (same parent) or parent-subsidiary (one controls the other) matters significantly in legal contexts: sister companies generally cannot be held jointly liable for each other’s obligations, while a parent may sometimes face liability for a subsidiary’s actions.