What are SPVs (Special Purpose Vehicles) ?
What is its legal identity?
Which law / act -section describes this?
thanks in advance.
Raj Kumar Makkad (Adv P & H High Court Chandigarh) 26 January 2010
visit the following link wherein the entire detail has been given:
A V Vishal (Advocate) 26 January 2010
The acronym stands for special purpose vehicle. The word vehicle can be interchanged with market entity. In the US, the term used is special purpose entity (SPE). The name SPV is given to an entity which is formed for a single, well-defined and narrow purpose. An SPV can be formed for any lawful purpose. No SPV can be formed for an unlawful purpose, or for undertaking activities which are contrary to the provisions of law or public policy. An SPV is, primarily, a business association of persons or entities eligible to participate in the association.
SPVs are mostly formed to raise funds from the market. Technically, an SPV is a company. It has to follow the rules of formation of a company laid down in the Companies Act. Like a company, the SPV is an artificial person. It has all the attributes of a legal person. It is independent of members subscribing to the shares of the SPV. The SPV has an existence of its own in the eyes of law. It can sue and be sued in its name. The SPV has to adhere to all the regulations laid down in the Companies Act. Members of an SPV are mostly the companies and individuals sponsoring the entity. An SPV can also be a partnership firm. This, however, is unusual.
abhijit (legal ) 26 January 2010
thank you Makkad saahab and Mr Vishal. i think i ll be able to gather information from the valuable info you have provided.
But is there any law relating to SPV in india?
i searched on google. but there is a law called 'Special Purpose vehicles act 2002' of philipines.
is there any law relating to SPV in india?