3. What is a legal difference between Syndicate and VC Fund?

Funds and Syndicates are two of the most popular structures of investment vehicles and have a lot in common. Both Funds and Syndicates have a limited liability meaning that the personal liability of their investors is limited to the amount of money invested in a Fund or a Syndicate.

However, Funds and Syndicates have different corporate constitutions – Limited Partnership Agreement in Funds and LLC Agreement in Syndicate.

Because of their different legal natures (partnership and corporation), Funds and Syndicates are regulated by different acts and are applied by different legal concepts. This can be illustrated, for example, by the terminology used in relation to investors (Limited Partners in Funds and Members in Syndicate) and managers (General Partners in Funds and Managing Members in Syndicate). However, these legal differences are rather nominal and insignificant in a business sense. The main distinction between these entities relates to their structures (see Question 4).