A Special Purpose Company (SPC) is a legal entity created for a specific, narrow, and temporary purpose. SPCs are commonly used for project financing, asset securitization, and risk management. They are designed to isolate the risks and liabilities associated with a particular project or transaction from the broader activities and balance sheets of the parent company.

Understanding the Idea of Special Purpose Companies:- Special Purpose Companies (SPCs) are often created to serve a specific, temporary, and narrow purpose. These entities are typically used to isolate risks and liabilities associated with a particular project or transaction from the broader activities and balance sheets of the parent company. This allows companies to undertake high-risk projects or transactions without risking their entire business.

SPCs can be used for various purposes, including project financing, asset securitization, and risk management. They can issue debt or equity securities, and their ownership structure can be customized to meet the specific needs of the transaction. SPCs can be set up in different jurisdictions, depending on the legal and regulatory environment and tax considerations. Overall, SPCs offer a flexible and efficient tool for managing risk and financing projects.