Proprietorship vs Partnership vs LLP vs Pvt Ltd — Which is Best for You?
By Parul Singh, GST Practitioner · Business
Table of Contents
In 15 years, I converted dozens of businesses from proprietorship to LLP to Pvt Ltd as they grew. Here is the honest comparison.
Choosing the right business structure is one of the most important decisions you'll make. Here's a detailed comparison of all major entity types in India.
Quick Comparison
| Feature | Proprietorship | Partnership | LLP | Pvt Ltd |
|---|---|---|---|---|
| Registration | Not required | Optional | Mandatory | Mandatory |
| Liability | Unlimited | Unlimited | Limited | Limited |
| Members | 1 | 2-50 | 2+ | 2-200 |
| Compliance | Minimal | Low | Medium | High |
| Tax rate | Slab rates | Slab rates | 30% | 25-30% |
| Funding | Difficult | Difficult | Moderate | Easy |
| Setup cost | ₹0 | ₹3,000 | ₹8,000 | ₹15,000 |
| Transferability | Not possible | Difficult | Moderate | Easy |
When in doubt: Start lean (proprietorship/partnership), convert to LLP/Pvt Ltd when the business grows or you need funding.