If you are a syndicator, you should pick a naming convention for all of the entities in all of your syndicates and stick to it.
You can have as many as five entities in a syndicate, but most commonly, you will only have two. If you can figure out which one is which without having to resort to an organization chart, it will greatly simplify your life.
Here are some naming guidelines:
- The Investor LLC or LP should have one of the following words in its title: Investors, Investments, or Partners. This way you will always know this is the investment entity, and more importantly for securities compliance purposes, this is the Issuer of your Securities.
- The Manager LLC should have one of the following words in its title: Manager, Asset Manager, Management, Mgr or Mgt. This way you will always know this is the manager of your syndicate entity, and more importantly for securities compliance purposes, this is the “Manager” of the Issuer of your Securities. If you are using a limited partnership, you could use “GP” or “General Partner” in the entity name. You are picking a word that makes it obvious that this is the management of your syndicate.
- You may need a separate title holding entity. This will be required if the loan balance is greater than $10M and you are getting agency debt, such as Fannie Mae or Freddie Mac based financing, or if you plan to do so in the future. If you are using a title holding entity, it will helpful if you use one of the following words in it: Holdings, Hldgs, or Owner, or even TH (for Title Holding) entity. You are picking a word that makes it obvious that this is the title holding entity.
- If you are including a Joint Venture with a private equity partner along with your syndicate and it requires a separate JV entity, you may want to use “JV” or “Joint Venture” or some other word in the name that makes it obvious that this is the joint venture level entity.
The words you put in the name of your entity before any of the words suggested above should be related to either the name of the property, its street address or your brand. The maximum number of words you should use in an entity name should be four. If you can’t use a name because it’s already in use by someone else, you can add some numbers (such as the numbers of a street address) or initials (such as a word from your brand or some initials of the name of the property), ahead of the body of the name.
Following are some example organizational charts with suggested names. One is for a simple Syndicate with a Management entity; the other is for a more complex Joint Venture between your Syndicate and a PE Partner.
