sihtettevõtte

sihtettevõtte is an Estonian term that translates to "target company" or "project company." It refers to a company that is specifically established or acquired for a particular purpose, often related to a defined project, investment, or strategic objective. These companies are not typically intended for long-term independent operation but rather serve as a vehicle to achieve a discrete goal.

The formation or utilization of a sihtettevõtte can occur in various scenarios. For instance, a larger corporation might create a sihtettevõtte to house a new, innovative venture that requires a separate legal and operational structure. Alternatively, it could be a special purpose vehicle (SPV) established for a real estate development project, a specific acquisition, or to manage a particular asset or liability. In venture capital and private equity, a sihtettevõtte might be the entity through which an investment is made into another business.

The key characteristic of a sihtettevõtte is its focused and often temporary nature. Once the intended objective is met, the sihtettevõtte may be dissolved, merged with another entity, or its operations may be integrated into the parent organization. The structure and governance of a sihtettevõtte are typically designed to facilitate the efficient execution of its specific purpose, with clear lines of responsibility and reporting.