This article curated by our business experts, would help you to choose the correct Business Entity to start your Dream Business
A sole proprietorship is a non-registered, unincorporated business run solely by one individual proprietor with no distinction between the business and the owner. The owner of a sole proprietorship is entitled to all profits but is also responsible for the business’s debts, losses, and liabilities.
A Partnership Firm is form by two or more people where a formal agreement is made who agree to be the co-owners, distribute responsibilities for running an organization and share the income or losses that the business generates. Firm registration is not mandatory.
Limited Liability Partnership (LLP) is a body corporate, formed and incorporated by two or more designated partners and partners under the Companies Act, 2013. It is a separate legal entity and the liability of the designated partners/partners are limited.
One Person Company (OPC) is a body corporate, formed and incorporated by a single person under the Companies Act, 2013. It is a type of Sole proprietorship with benefits of Private company and eliminate the disadvantage of Sole proprietorship.
Private Limited Company means a company whose shares are not offered to the public, also any limited company whose shares were originally offered to the public and are no longer available to the general public, or that were removed from trading on a regulated market shall also be considered a private company.
|Factors of Comparison||Sole Proprietor||Partnership Firm||Limited Liability Partnership||One Person Company||Private Limited Company|
|Capital||Minimum: No Requirement Maximum : No Limit||Minimum: INR 1/- Maximum : No Limit||Minimum - INR 1/- Maximum - No Limit||Minimum - INR 1/- Maximum - No Limit||Minimum - INR 1/- Maximum - No Limit|
|Director||Not Applicable||Not Applicable||Not Applicable||Minimum 1||Minimum 2|
|Shareholder||Not Applicable||Not Applicable||Not Applicable||Only 1||Minimum 2 and Maximum 200|
|Designated Partner/Partner||Not Applicable||Minimum 2||Minimum 2||Not Applicable||Not Applicable|
|Taxation||As per Tax Slabs||30% + Cess||30% + Cess||25% + Cess||25% + Cess|
|Statutory Audit||Compulsory above Turnover 2 Crore||Above Turnover 5 Cr.||If Contribution exceed INR 25 Lacs; If Turnover exceed INR 40 Lacs||Compulsory||Compulsory|
|Investors Preference||Low||Low||Medium||Not Possible for Fundraising||High|
|Regulator||Not Applicable||Register of Firms||Registrar of Companies||Registrar of Companies||Registrar of Companies|
|Time take for Registration||3-4 Working Days||3-4 Working Days||48 Working Hours||48 Working Hours||48 Working Hours|