Also known as a bankruptcy-remote entity or a single or special purpose entity (SPE).

A legal entity created for a limited single purpose, to isolate financial risk and minimise bankruptcy risk (making it bankruptcy remote). SPVs are used for a number of purposes including the acquisition or financing of a project, or the set up of a securitisation or a structured investment vehicle. They are usually used because they are free from any pre-existing obligations and debts and are separate to the parties that set them up for accountancy, tax and insolvency purposes. To maintain these benefits, they are typically prohibited from incurring additional debt or other obligations other than in connection with their purpose.