Special Purpose Entities (SPEs)

Special Purpose Entities (SPEs) are separate legal entities created by a company to isolate financial risk or achieve specific financial goals. They are used to hold assets, manage risks, or finance projects without exposing the parent company directly. SPEs help companies manage complex transactions, improve financial statements, or access funding more easily. Legally distinct from the parent, they limit liability and protect the main company from certain risks. While they serve legitimate business purposes, they can also be misused to hide liabilities or manipulate financial results if not transparently managed.