Compare structures
Pvt Ltd vs LLP vs OPC vs Proprietorship — which one's right for you?
A side-by-side comparison of the four most common Indian business structures — members, liability, tax, compliance, fundraising, and the founder type each one fits. Updated for 2026.
Quick verdict
If you skip the table, here's the short answer
Solo founder, just testing the idea
→ Sole Proprietorship
Lowest compliance, cheapest setup, easy to convert later when revenue + clarity grows.
Solo founder, want limited liability + a company brand
→ OPC (One Person Company)
Limited liability + proper company structure, without needing a co-founder. Auto-converts to Pvt Ltd above ₹2 Cr turnover.
Two professionals / consultants partnering
→ LLP
Limited liability + lower compliance than Pvt Ltd. Right pick if you do not plan to raise VC.
Startup that plans to raise capital
→ Private Limited Company
Only structure that supports VC funding, ESOP, and equity dilution. Comes with higher compliance — worth it for fundraising.
Side-by-side
The full comparison table
| Feature | Pvt Ltd | LLP | OPC | Proprietorship |
|---|---|---|---|---|
| Minimum members | 2 directors + 2 shareholders (can be same) | 2 partners | 1 director + 1 nominee | 1 owner |
| Maximum members | 200 shareholders | Unlimited | 1 (cannot have multiple owners) | 1 |
| Liability | Limited | Limited | Limited | Unlimited (personal assets at risk) |
| Separate legal entity | Yes | Yes | Yes | No |
| Income tax rate | 22% (new regime, no exemptions) or 25% (turnover ≤ ₹400 Cr) | 30% flat | 22% (new regime) or 25% | Slab rate — 5% to 30% based on personal income |
| Can raise equity funding | Yes — shares to investors / VCs | No (no shares; can add partners only) | No until converted to Pvt Ltd | No |
| ESOP support | Yes — primary use case | No | Limited | No |
| Compliance burden | High — board meetings, ROC AOC-4, MGT-7, statutory audit | Medium — Form 8 & Form 11; audit only above turnover threshold | Medium — similar to Pvt Ltd but simpler board structure | Low — just ITR + GST returns if applicable |
| Mandatory audit | Yes (every year) | Only if turnover > ₹40 L or capital > ₹25 L | Yes (every year) | Only if turnover > ₹1 Cr (₹50 L for professionals) |
| Conversion to other structure | Can convert to LLP later | Cannot easily convert to Pvt Ltd | Must convert to Pvt Ltd above ₹2 Cr turnover / ₹50 L capital | Easy to convert to LLP / Pvt Ltd later |
| Setup time | 7–12 working days | 7–10 working days | 7–10 working days | 1–3 working days |
| DPIIT (Startup India) eligible | Yes | Yes | Yes | No |
| Annual filing fees (approx) | ₹5,000–₹15,000 | ₹2,000–₹6,000 | ₹4,000–₹12,000 | ₹0 (no ROC filings) |
All figures and limits as per Companies Act 2013, LLP Act 2008, and current Income Tax provisions. Confirm your specifics with our CA team — every founder's case has nuances.
Common questions
Frequently asked when choosing a structure
Can I convert sole proprietorship to Pvt Ltd later?
Yes. Most founders start as proprietorship and convert to Pvt Ltd around ₹50 L–₹1 Cr revenue or when they decide to raise capital. Openedze handles the conversion end-to-end.
Why is Pvt Ltd more expensive than LLP if both have limited liability?
Pvt Ltd requires annual statutory audit (regardless of turnover), board meetings, more ROC filings, and stricter director compliance. LLP skips most of that until you cross the audit threshold (₹40 L turnover).
Is OPC the same as a one-person Pvt Ltd?
Structurally similar — OPC is a special category of company under the Companies Act 2013, designed for solo founders. It must convert to a regular Pvt Ltd once it crosses ₹2 Cr turnover or ₹50 L paid-up capital.
Which structure is best for ESOP allocation?
Private Limited Company is the only practical choice for ESOPs. LLPs cannot issue shares. OPC has limited ESOP flexibility because of the single-shareholder requirement.
Can I get DPIIT (Startup India) recognition with an LLP?
Yes. DPIIT recognition is available to Pvt Ltd, LLP, and OPC — but not to sole proprietorship or partnership firm. The tax holiday under Section 80-IAC is available to all three eligible structures.
Still not sure?
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