Free Tool · India 2025 · 5 Business Structures Compared
Company Type Comparison Wizard
Answer 5 quick questions and get a personalised recommendation. Then compare all five Indian business structures side-by-side on tax rates, liability, compliance cost, fundraising ability, and FDI rules — with citations to the governing Act for every data point.
Reviewed by Harun Raaj, CA — ICAI Membership No. 238303 · Firm Reg. 19027S · Updated July 2026
Stage 1 — Quick Questionnaire (5 questions)
Question 1 of 5
How many founders / owners will the business have?
Question 2 of 5
Do you want limited liability protection (personal assets shielded from business debts)?
Question 3 of 5
Do you plan to raise equity funding from investors or VCs?
Question 4 of 5
Will you need foreign investment or do you have NRI co-founders?
Question 5 of 5
What is your likely first-year revenue?
Answer all 5 questions above to get a personalised structure recommendation.
Stage 2 — Full Comparison
Click any row to see a detailed note. Green = favourable, Red = unfavourable.
| Parameter | Proprietorship Register → | Partnership Register → | LLP Register → | OPC Register → | Pvt Ltd Register → |
|---|---|---|---|---|---|
| Governing Act | No specific Act (GST/MSME registration) | Indian Partnership Act, 1932 | LLP Act, 2008 | Companies Act, 2013 | Companies Act, 2013 |
| Minimum members | 1 | 2 | 2 | 1 | 2 |
| Maximum members | 1 | 50 | No limit | 1 + nominee | 200 |
| Registration body | No formal registration needed | Registrar of Firms | MCA21 | MCA21 | MCA21 |
| Typical registration time | 1–2 days | 3–5 days | 10–15 days | 10–15 days | 10–15 days |
| Typical registration cost | ₹500 – ₹2,000 | ₹2,000 – ₹5,000 | ₹5,000 – ₹15,000 | ₹7,000 – ₹12,000 | ₹7,000 – ₹15,000 |
| Personal liability▼ | Unlimited | Unlimited (joint & several) | Limited to contribution | Limited | Limited |
| Corporate tax rate▼ | Personal slab (0–30%) | 30% + 4% cess | 30% + 4% cess | 25% + surcharge + 4% cess | 25% (turnover ≤₹400Cr) + surcharge + 4% cess |
| Statutory audit▼ | Sec 44AB, IT Act 1961 (≡ §63, IT Act 2025) if turnover >₹1Cr | Sec 44AB, IT Act 1961 (≡ §63, IT Act 2025) if turnover >₹1Cr | If turnover >₹40L or contribution >₹25L | Mandatory every year | Mandatory every year |
| Annual compliance cost▼ | Low — ITR only | Low — ITR + partnership deed | Medium — MCA filings + ITR | Medium — MCA + ITR + audit | Medium-High — MCA + ITR + audit + board meetings |
| Equity fundraising▼ | Not possible | Not possible | Possible (no shares, complex structure) | Not possible (no equity) | Full — shares, convertibles, VCs |
| Foreign investment (FDI)▼ | Not allowed | Not allowed (RBI restriction) | Allowed with conditions (FEMA / RBI approval route) | Not allowed | Allowed — automatic / approval route |
| Suitable for | Freelancers, small traders | Professional firms, small businesses | CA/CS/law firms, professionals, service businesses | Solo founders wanting corporate structure | Startups, businesses planning growth or funding |
Proprietorship
Personal liability
Unlimited
Corporate tax rate
Personal slab (0–30%)
Equity fundraising
Not possible
Foreign investment (FDI)
Not allowed
Suitable for
Freelancers, small traders
Partnership
Personal liability
Unlimited (joint & several)
Corporate tax rate
30% + 4% cess
Equity fundraising
Not possible
Foreign investment (FDI)
Not allowed (RBI restriction)
Suitable for
Professional firms, small businesses
LLP
Personal liability
Limited to contribution
Corporate tax rate
30% + 4% cess
Equity fundraising
Possible (no shares, complex structure)
Foreign investment (FDI)
Allowed with conditions (FEMA / RBI approval route)
Suitable for
CA/CS/law firms, professionals, service businesses
OPC
Personal liability
Limited
Corporate tax rate
25% + surcharge + 4% cess
Equity fundraising
Not possible (no equity)
Foreign investment (FDI)
Not allowed
Suitable for
Solo founders wanting corporate structure
Pvt Ltd
Personal liability
Limited
Corporate tax rate
25% (turnover ≤₹400Cr) + surcharge + 4% cess
Equity fundraising
Full — shares, convertibles, VCs
Foreign investment (FDI)
Allowed — automatic / approval route
Suitable for
Startups, businesses planning growth or funding
Not sure which structure is right for you?
Our CA team can help you choose the right structure for your business model, tax position, and compliance budget. Reach us at your convenience.
Statutory Basis
Companies Act, 2013
Governs Private Limited Companies, One Person Companies, and Public Limited Companies. Registration via MCA21 SPICe+ form.
Limited Liability Partnership Act, 2008
Governs LLPs. Annual filings: Form 8 (Statement of Accounts) and Form 11 (Annual Return) on MCA21.
Indian Partnership Act, 1932
Governs unregistered and registered partnership firms.
Income Tax Act, 1961 — Tax Rates
Partnership firms and LLPs taxed at 30% + surcharge + 4% cess [Section 112]. Companies with turnover ≤ ₹400 crore: 25% + surcharge + 4% cess [Section 115BAB / 115BAA]. Default company rate: 30%.
Statutory Audit Requirements
Companies Act, 2013 Section 139 — every company must appoint a statutory auditor. LLP audit required if turnover > ₹40 lakh or contribution > ₹25 lakh [LLP Act, 2008 Section 34]. Proprietorship/Partnership: Tax audit under Sec 44AB, IT Act 1961 (≡ §63, IT Act 2025) of Income Tax Act if turnover > ₹1 crore (₹2 crore if Section 44AD applies).
Frequently Asked Questions
What is the key difference between a Private Limited company and an LLP?+
A Private Limited company has shareholders (equity ownership) and directors (management), making it ideal for VC/PE funding and ESOPs. An LLP has designated partners with flexible profit-sharing and lower compliance cost, but cannot issue equity shares or accept VC investment directly. Source: Companies Act, 2013; Limited Liability Partnership Act, 2008.
Which entity type has the lowest annual compliance cost?+
OPC (One Person Company) and LLP have the lowest compliance burden. LLP files only Form 11 (annual return) and Form 8 (statement of accounts), with no mandatory statutory audit unless turnover > ₹40L or contribution > ₹25L. Source: LLP Act, 2008; MCA LLP Rules, 2009.
Can a startup registered as an LLP get DPIIT recognition?+
Yes. LLPs are eligible for DPIIT Startup India recognition if they meet the criteria (turnover < ₹100 Cr, incorporated < 10 years, innovative scalable model). However, angel tax exemption under Section 56(2)(viib) applies only to companies, not LLPs. Source: DPIIT Startup India notification; Section 56(2)(viib).
Can a Private Limited company be converted to an LLP?+
Yes, under Section 56 of the LLP Act, 2008 read with the Companies Act. The conversion is tax-neutral if the shareholding pattern is maintained. All assets and liabilities transfer to the LLP. Source: Section 56, LLP Act, 2008; CBDT Circular 355/44/2014.
What is the minimum capital required to register a Private Limited company?+
There is no minimum paid-up capital requirement for a Private Limited company since the Companies (Amendment) Act, 2015. A company can be incorporated with paid-up capital of even ₹1. Only authorised capital carries a stamp duty implication. Source: Section 2(68), Companies Act, 2013.
Not sure which structure is right for you?
Our CA team can help you choose the right structure for your business model, tax position, and compliance budget. Reach us at your convenience.
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