LLP SPV Structure for Real Estate Investments
Understand how we use a Limited Liability Partnership (LLP) as a Special Purpose Vehicle (SPV) to provide a secure, transparent, and efficient structure for our investment partners.
Why an LLP SPV?
For every single investment opportunity, we form a new, separate LLP. This SPV is a dedicated legal entity whose sole purpose is to acquire, hold, and manage that specific real estate asset. This is the cornerstone of our risk-mitigation strategy.
Legal & Tax Efficiency
The LLP structure is a corporate form that offers flexibility in management and is treated as a tax-efficient, pass-through entity for income distribution under current Indian tax law.
Limited Liability
As the name suggests, a partner's liability is limited to their agreed capital contribution, protecting their personal assets from the LLP's debts or losses.
Defined Governance
The LLP Agreement contractually defines the rights, duties, and obligations of both the Sponsor (as the Designated Partner) and the capital partners, ensuring clarity.
Asset-Level Isolation: The LLP holds only one asset. This means the financial performance, liabilities, or legal issues of one project have absolutely no impact on any other project.
No Cross-Collateralization: Assets from one LLP cannot be used as security for loans or liabilities of another LLP. Your investment is tied only to the performance of the asset held by the specific LLP you are a partner in.
Clean and Verifiable: Because each LLP is a new entity, it has a clean slate with no prior history, liabilities, or litigation. This simplifies due diligence for partners and future buyers.
As a capital partner in the LLP, you have clearly defined rights outlined in the LLP Agreement. While the Sponsor manages day-to-day operations, your rights typically include:
- Right to receive distributions as per the LLP agreement profit-sharing ratio.
- Right to access project reports and financial statements.
- Right to access the secure data room for the specific project.
- Voting rights on major decisions as defined in the LLP agreement (e.g., sale of the entire asset).
The LLP structure facilitates a high degree of transparency. All partners have access to:
- Regular Progress Reports: Quarterly or semi-annual updates on the project's status, milestones achieved, and upcoming activities.
- Financial Statements: Audited annual financial statements for the LLP, providing a clear view of its financial health.
- Secure Data Room: A centralized, access-controlled online repository containing all key project documents, from title deeds to approval certificates and financial models.
vs. Direct/Individual Ownership: In our LLP model, you own a share in a legal entity (the LLP), not the physical property itself. This provides limited liability, which individual ownership does not.
vs. Fractional Ownership: While both involve co-investing, fractional ownership typically gives you a direct, registered slice of the property's title. Our LLP structure is a partnership in a business that owns the asset, which is better suited for value-add and development projects where a sponsor's active management is key.
For a detailed breakdown, see our LLP vs. Fractional Ownership comparison.
For more on how this structure is governed and taxed, please see our pages on Investor Protection and Governance and the Taxation of LLP Investments.
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