How do you structure an SPV for investment property?

In this guide we will explore the legal and financial structure of a limited company (SPV) that is set-up to purchase an investment property.

Who owns the property when held in an SPV?

The limited company owns the property

When purchasing a property for investment purpose through a limited company (an SPV), the legal owner will be that company. It will appear on all the deeds and documents relating to the property at the land registry.

A company is a legal entity in its own right and as such has the right to enter into contracts and obtain finance just like an individual can. it can also sue or be sued. You can read more about

The ‘limited’ part of the name means the company’s liability is limited to the capital that the shareholders have invested. In theory this means the amount you’ve invested (your initial deposit), is the amount you will lose in the event of the company going bankrupt. Creditors cannot demand payment from shareholders and the company can continue to operate even if any (or all) of the shareholders goes bankrupt. This structure provides a layer of protection between you and the company.

Who are the shareholders?

Shareholders are the investors in the property

When buying property through an SPV the investors in that property are the shareholders/owners of the company. They are also known as the beneficiaries. The owner of the company generally has the final say on the overall investment strategy, when to buy, sell or lease and how to maximise profit for the company.

As beneficiaries any net profit made by the company can be distributed to the shareholders in the form of dividends.

Each share represents a unit of ownership of the company. For example, if a company issues 100 units of shares, and you own 50 units, you own 50% of the company.

(N.B. There are many forms of shares which all have different rights of ownership. For simplicity the above example assumes they are ordinary shares).

Who are the company directors?

Directors run the company

The directors of the company are the people who run the business and are regarded as employees. Director’s are liable for submitting all regulatory requirements and keeping the annual accounts up to date. They are also responsible for any corporation tax, legal or financial matters relating to the company and therefore determine the level of dividends to distribute to shareholders (amount is usually based on the company’s financial position). They are the only one(s) that can execute contracts on behalf of the company, this includes any major sale, purchase or lease agreement and other contracts related to the company. If the company is sued, they will represent the company.

The directors should always work with the shareholders to ensure they’re running the company inline with shareholder’s expectations.

Generally, in an SPV, both the owners and the directors are the same people, but this isn’t mandatory. If the owner does not wish to be the director of the company, then they should elect someone they trust to run the business on their behalf.

Directors are free to hire a third party to help them administer the whole SPV investment process if they do not have the time or skill-set to do so. This is where Orbis SPV property can help.

How do mortgages work with an SPV structure?

As mentioned above, companies can enter into contracts and therefore, can enter into a mortgage loan with a bank. The company will be named on the mortgage and will therefore be liable for any outstanding payments, just like an individual would be.

Being ‘limited’ should mean the bank can’t demand payment from shareholders in the event of the company not being able to cover the monthly repayments, however, lenders generally require the directors and/or shareholders to act as personal guarantors.

Read more about mortgages for SPVs .

Examples of typical SPV structures for buying property

Example 1:

  • Background — John and Margery (husband and wife) decide to purchase an investment property through a limited company
  • SPV Company — They form a company call ‘The Wall Limited’
  • Shareholders — The Wall limited issues 100 units of ordinary shares, they’re registered as company shareholders with 50 units each
  • Director — They both wish to be listed as directors in the company
  • Mortgage loan — The mortgage loan is in the company name with John & Margery named as personal guarantors.
  • Company Managers — John and Margery have very limited knowledge of corporate structure, accountancy and tax so they hire Orbis SPV property to handle all of the company’s affairs.

Example 2:

  • Background — A group of four people decide to pool their resources and buy an investment property together
  • Company — They form a company called ‘Castle Black Limited’
  • Shareholders — The company issues 100 units of ordinary shares for the four investors: Rob (40 units), Caitlin (20 units), Jamie (20 units), and Ned (20 units)
  • Director — They have a shareholder’s agreement which entrusts Rob (who has a legal background) and Ned (finance background) to act as directors and run the company on the shareholders’ behalf.
  • Mortgage loan — The mortgage loan is under the company’s name with Rob and Ned as personal guarantors.
  • Company Management — They decide with Rob and Ned’s legal & financial backgrounds, to set the company up themselves but don’t have the time to manage the company on an ongoing basis. They decide to use Orbis to handle all of the continuing accountancy for Castle Black Limited.

In example 2, we would recommend to have a shareholders agreement and articles of association due to number of various people involved.

What is involved in the management of the company?

  1. Formation of the company including setting up a separate business bank account and assigning correct SIC code
  2. Establishing directorship of the company. Directors of limited companies hold several obligations under Companies Act 2016–08–10 and are responsible for all ongoing financial matters of the company
  3. Structure share distribution
  4. Obtain and structure financing for the property that meets investors’ goals
  5. Ongoing accounting, recording and documenting of company accounts. Managing both the company’s balance sheet and profit and loss statement
  6. Managing Corporation tax and dividend payments
  7. Increased statutory obligations such as submission of annual accounts to Companies House
  8. Staying on top of all relevant tax, legal and financial changes.
  9. Thorough tax planning structure


The basic corporate structure of an SPV limited company can be summarsised in three steps, (1) The company legally owns the property, (2) Shareholders are the beneficiaries, (3) The director(s) run the company.

Buying and running a property through a company is not an easy task. it’s vital that you understand the company structure, how it works, your legal rights and constantly keep up to date with all the regulatory and tax requirements. You could be looking at a hefty fine if the company is not managed correctly. and see how Orbis SPV Property can help you take the hard work out of the whole process.

Disclaimer: This guide provides general information only and does not constitute professional financial, legal or tax advice. Legislation and policy are constantly changing and all information is correct at the time of publication. We recommend that you seek professional advice based on your personal circumstances.

CPA Accountant and Director at Run the Numbers. Loves traveling and life. Drop a note at