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Company Type Comparison: Which Business Structure Is Right for You?
Compare the main business structures in India side by side, then use the short chooser to see which one fits your plans.
Which business structure should I choose in India?
Choose a Private Limited company if you plan to raise equity funding, an LLP if you run a professional or small business and want limited liability with lighter compliance, an OPC if you are a solo founder, a Section 8 company for a non-profit, and a proprietorship or partnership for the simplest start with no limited liability.
Comparison
Business structures in India compared
Indicative comparison. Rules and tax rates change, so confirm with a CA.
| Feature | Private Limited | OPC | LLP | Public Limited | Partnership | Sole Proprietorship | Section 8 Company |
|---|---|---|---|---|---|---|---|
| Governing law | Companies Act, 2013 | Companies Act, 2013 | LLP Act, 2008 | Companies Act, 2013 | Partnership Act, 1932 | No specific Act | Companies Act, 2013 |
| Minimum members | 2 directors and 2 shareholders | 1 director and 1 nominee | 2 partners | 3 directors and 7 members | 2 partners | 1 owner | 2 directors and 2 members |
| Separate legal entity | Yes | Yes | Yes | Yes | No | No | Yes |
| Owner liability | Limited to shares | Limited to shares | Limited to contribution | Limited to shares | Unlimited | Unlimited | Limited, by guarantee or shares |
| Raise equity funding | Yes, easily | Limited | No equity shares | Yes, including the public | No | No | No profit distribution |
| Compliance level | Medium to high | Medium | Low to medium | High | Low | Very low | High |
| Audit | Mandatory every year | Mandatory every year | Above ₹40 lakh turnover or ₹25 lakh contribution | Mandatory every year | Only if the tax audit limit is crossed | Only if the tax audit limit is crossed | Mandatory every year |
| Income tax (indicative) | Corporate rate; about 25% under the concessional regime | Corporate rate; about 25% under the concessional regime | 30% plus surcharge and cess | Corporate rate; about 25% under the concessional regime | 30% plus surcharge and cess | Individual slab rates | Exempt on income applied to objects, with 12A |
| Best for | Startups and scaling businesses | Solo founders wanting a company | Professional firms and small businesses | Large businesses and IPOs | Traditional family businesses | Freelancers and small traders | Charity, education and NGOs |
Chooser
Not sure? Answer four questions
FAQ
Choosing a business structure: frequently asked questions
Which is better, a Private Limited company or an LLP?
A Private Limited company suits businesses that plan to raise equity funding or issue shares. An LLP suits professional firms and small businesses that want limited liability with lighter compliance.
Which business structure has the lowest compliance?
A sole proprietorship has the lowest compliance, followed by a partnership firm. Both give no limited liability to the owners.
Can I convert my proprietorship into a company later?
Yes. Many businesses start as proprietorships and incorporate later as their needs grow.
Which structure is best for a startup that wants investors?
A Private Limited company, because it can issue equity shares and ESOPs, which investors usually require.
Get in touch
Get advice on the right structure
A Chartered Accountant will recommend a structure based on your plans.
- Phone+91-9278813303
- Emailinfo@cadeoassociates.com
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