How does Syndicate Work?
A syndicate represents a temporary collaboration among businesses, uniting to collectively oversee significant transactions that would be challenging or unfeasible for individual entities to execute. The primary purpose of forming a syndicate is to combine resources and distribute risks, enabling the participating companies to tackle projects or transactions that exceed the capabilities of a single entity. For instance, within the banking sector, a consortium of banks may establish a syndicate to extend a substantial loan to a high-risk party, with each bank sharing in the associated risks and potential returns. Members of a syndicate collaborate to navigate specific business endeavors, and for taxation purposes, the syndicate is typically treated as a newly established partnership or corporation.