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Guides · Choosing a structure

Pvt Ltd, LLP, OPC or Proprietorship — which one should you register?

The four most common structures compared on what actually decides it: liability, tax, audit, annual compliance and whether you can raise outside funding.

Ask which fits youSee all structures
Updated 2026Read 6 minBusiness setup

The comparison, side by side

The same questions asked of all four, for FY 2026-27.

What mattersProprietorshipLLPOPCPrivate Limited
Owners12+ (no max)1 + nominee2–200
LiabilityUnlimitedLimitedLimitedLimited
Separate legal entityNoYesYesYes
Income taxPersonal slab30% + cess22–25%22–25% (15% new mfg)
Statutory auditOnly past turnover limitsIf turnover > ₹40L or capital > ₹25LEvery yearEvery year
Annual complianceLowestModerateHighHighest
Outside equity fundingNoNo sharesNot practicalYes — VC, angels, ESOPs
Best forSolo, small, low riskPartners & service firmsSolo founder, limited liabilityStartups that will raise / scale
Read the two rows that matter most for you: if you will raise investment, “outside equity funding” points to Private Limited. If you want the lightest running cost, “annual compliance” points to Proprietorship or LLP.

How each one is taxed

Tax is often the deciding factor once profits grow.

Proprietorship

Taxed at your personal income-tax slab. Fine while profits are modest; the rate climbs as you earn more.

LLP & Partnership

Flat 30% plus cess (with surcharge above ₹1 crore). Simple and predictable, but no lower company rate.

OPC & Private Limited

22% under section 115BAA (about 25.17% effective), or 25% if turnover is within ₹400 crore — and 15% for new manufacturing.

Choose by what you’re optimising for

Raising funding → Private Limited

Equity shares, ESOPs and a structure investors recognise. The default for a fundable startup. From ₹7,999.

Solo + limited liability → OPC

One owner, a separate legal shield, and a company on paper. Convert to Pvt Ltd whenever you’re ready. From ₹7,999.

Partners, no outside equity → LLP

Limited liability with lighter compliance than a company — ideal for professional and services firms. From ₹6,999.

Cheapest to start → Proprietorship

One PAN, minimal filings, up and running fast. Best while you’re testing an idea. From ₹2,499.

Not sure? Ask usSee what a Pvt Ltd costs

Common questions

Can I convert later — say LLP or OPC into a Private Limited?
Yes. An LLP or OPC can be converted into a Private Limited company later, and an OPC can convert voluntarily at any time. It’s common to start lean and convert when you raise funding.
Does an OPC have to become a Private Limited at some turnover?
No. The old mandatory-conversion thresholds were removed in 2021. An OPC can keep operating and convert only when you choose to.
Which is cheapest to run each year?
A Proprietorship — no ROC filings and no statutory audit unless turnover crosses tax-audit limits. An LLP is next; OPCs and Private Limiteds carry annual ROC filings and a statutory audit every year.
Can a proprietorship raise investment?
Not practically — investors put money into companies, not proprietorships. You’d convert to a Private Limited first, which is why fundable startups begin there.
Do LLPs always need an audit?
Only if turnover exceeds ₹40 lakh or partner contribution exceeds ₹25 lakh. Below that, an LLP is not required to have its accounts audited.
What’s best for a startup raising VC?
A Private Limited company — it can issue equity shares and ESOPs, and it’s the structure investors, accelerators and banks expect.
One team, all year

Tell us your plan — we’ll tell you the right structure

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