A:SPV's are created by a parent company to isolate specific assets, investments, debt or financing in a separate company, the SPV. Most often these separate companies keep their own balance sheet and are not referenced on the parent companies as they are frequently used to undertake high-risk projects, isolating the parent company from any associated risks.
The separate company structure ensures all its operations are insular from the parent companies.
Special Purpose Vehicles are companies/legal entities created for a specific purpose and can help businesses when they need to:
Secure and isolate assets (asset securitization), operations or investment / financing of a project
Create joint ventures or partnerships for specific projects
Perform certain financial transactions
Mitigate risks to parent company
SPV's are popular with entrepreneurs & commonly used when structuring and setting up a company in the UK, especially by property investors when purchasing properties & real estate or for buy-to-let purposes.