LLC (limited liability company)
See Master LLC, Regular LLC/LP, and Series LLC
LLC-12
California Statement of Information form required for every California and registered foreign LLC within 90 days of registration and every two years thereafter.
Major Investor
A term used to describe investors that contribute large amounts to an investment round. The required minimum amount for an investor to be considered a major investor is specifically stated in the purchase agreement. Major Investors receive rights and benefits that non-major investors (smaller investors) do not receive. Some examples of major investor benefits are […]
Management Fee
A fee paid to SPV Organizers for their time and effort in managing the investment relationship between the SPV and the investment portfolio. Some of the activities an Organizer may engage in are tracking the progress of the asset, reviewing investment portfolio reports and materials, administration tasks of the SPV like post close activities and […]
Manager
An individual or entity that is responsible for the SPV entity (LLC or LP). A common term for Manager is GP because in the LP/GP structure the GP is the manager of the LP structure. When an LLC structure is used an LLC can be managed by a “Manager” or by its members and SPVs […]
Master LLC
Master LLC is the entity registered with the state of Delaware or another state that recognizes series. Part of the series LLC structure (see series LLC definition). It is required to have a Master LLC registered with Delaware before creating any Series LLCs associated with it. The Master LLC is like a parent, or “mothership” […]
Maturity Date
Maturity date is the date on which the principal amount of a note, draft, acceptance bond or another debt instrument becomes due and is repaid to the investor and interest payments stop. It is also the termination or due date on which an installment loan must be paid in full. Maturity dates can be extended. […]
Membership Class
Stockholders owning different shares in different companies or assets within the same SPV. Treatment of the investors within the SPV is different because each investor, or portion of investors, owns a different asset or assets from the other SPV investors. Investors are defined as Members of the SPV. Membership classes are a complex accounting puzzle […]
Membership Interest (Membership units, member)
A membership interest is an investor’s ownership stake in an LLC (not an LP). Each investor in an LLC is called a “member.” A person who holds a membership interest has a profit and voting interest in the LLC. Ownership in an LLC can be expressed by percentage ownership interest or membership units. A membership […]
Membership Sale
Sometimes investors wish to sell their SPV membership interest to a third party for more or less (usually more) than the amount they originally contributed when they invested into the SPV. It is advised to consult legal counsel and the SPV fund documents in these matters. A membership sale requires legal documentation and cap table […]
Membership Transfer
Oftentimes an investor needs to change the entity that invested in the SPV. For example, an investor might use an LLC to make an investment and then years later set up a trust that will hold all of the investor’s assets, including the investment they made into the SPV. The investor will ask the Organizer […]
Merger
A merger is a deal to unite two existing companies into one new company. There are several types of mergers and also several reasons why companies complete mergers. Most mergers unite two existing companies into one newly named company. Mergers and acquisitions are commonly interchangeable terms. SPVs that own shares in a company that merges […]
MFN (Most Favored Nation)
In a contract, a most favored nation clause indicates that one party has the right to the best pricing or terms for similar types of transactions. SPV Organizers might use a MFN clause when negotiating an investment into an asset. Or an SPV Organizer might agree to an MFN clause with an investor who wishes […]
Multi-Asset
The same legal entity (SPV) investing in more than one asset. Typically an SPV invests into one asset but sometimes an Organizer will use one SPV and invest into two or more assets. A multi-asset SPV can function more as a venture fund than an SPV.
New Round
Is another round of business financing by SPV Organizers, private equity investors or venture capitalists, for a company to raise capital. See Investment Round.