An entity created for limited time for a very specific purpose.
A syndicate consists of several legally and economically independent companies, and is headed by one or more syndicate leaders. Syndicates are created to oversee large-scale financing operations, such as the placement of securities, in order to spread the risk among several companies. The members sign an informal syndicate agreement that specifies the purpose of the syndicate, the length of time it is to exist, its composition and ownership structure, and the tasks to be performed by individual member. The agreement also stipulates each member's liability and the extent to which it participates in profits and losses. The syndicate is usually dissolved when the stated goal has been reached.
In the case of a new issue, banks or investment companies will form an underwriting syndicate which acquires the stocks or bonds from the issuer and places them in the capital market.
