Special Purpose Vehicles

 

 

Special Purpose Vehicles (SPV’s) or Special Purpose Entities (SPE’s) are usually established solely for a particular purpose, transaction or series of transactions rather than for the benefit of a person, charity or a corporation. The purpose can be virtually anything but Special Purpose Vehicles are usually created for the sole purpose of acquiring certain assets or derivative exposures and issuing liabilities that are thereby linked solely to those assets or exposures.

Special Purpose Vehicles: entities with one purpose

 

 

Special Purpose Vehicles benefits

Special purpose vehicles can be established to contain intellectual property (IP) supporting assets, like brands. Placing an intangible asset in a Special Purpose Vehicle can have a number of benefits. The management of the IP can be improved greatly as it helps focus on the commercial development of the asset itself. This is articulated quite directly as different business units will have to pay for the use of the asset. A Special Purpose Vehicle can also offer tax benefits depending on the tax rules for taxing income and allowing IP amortisation. Another benefit of such special purpose vehicles is that there can be used to ring-fence intellectual property, examples being when it is used as security to raise finance and to isolate it from other business risks such as insolvency.

Special Purpose Vehicles are, generally, limited liability companies or limited partnerships, but also special purpose trusts are used.

SPVs  have also been used in numerous varieties of commercial transactions including securitisations, ship and aircraft financing and employee share ownership plans.

Braxton analyse each client’s situation relating to Special Purpose Vehicles carefully, point out available options, develop a plan of action and make it happen.