![]() ![]() The positive aspects of forming syndicates, specifically in the financial world, include the ability to spread out risk while maximizing reward. In the realm of trading, a syndicate is usually a group of independent traders and brokers that band together to collectively assume the risk of buying and selling securities. For tax reasons, syndicates are treated as newly-formed corporations or partnerships in order to keep taxation at a minimum. In many instances, a syndicate is formed on a temporary basis, though temporary is defined as whatever length of time the groups within the syndicate need to promote one another and accomplish the goal that they’ve established. In investment banking, syndicated lending is when a group of banks provides the capital for a single loan, spreading the risk across several institutions. In most cases – almost entirely true in the case of syndicated companies and corporations – the primary purpose is to promote goods and services and increase profits for all the entities involved. A syndicate’s primary notable quality is that the groups within it work together to conduct some type of business in order to pursue and promote their collective interests. The group is organized independently by the entities that form it. A syndicate is an organized group of just about anything – corporations, other entities, or even individuals.
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