Which Business Form is Best for Me?
Starting a business is a huge step and knowing which business will make most sense depends on various factors such as the number of partners you plan to start a business with, funding requirements, compliances your company can bear, and liability separation of owner and firm, tax rates, and more.
In this post, we have prepared a quick table reference for you wherein you can look at the various factors that will help you decide the type of business you should go with:
Difference between Business Entities in India
| FEATURES | Private Limited Company | One Person Company | Limited Liability Partnership | Partnership Firm | Proprietorship Firm |
|---|---|---|---|---|---|
| Acts involved | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Indian Partnership Act, 1932 | No specified Act |
| Separate Legal Entity | Yes | Yes | Yes | No | No |
| Registration Requirement | Mandatory | Mandatory | Mandatory | Mandatory | No |
| Number of members | 2 to 200 | 1 | 2- unlimited | 2 to 20 | 1 |
| Liability Protection | Limited | Limited | Limited | Unlimited | Unlimited |
| No.of Directors | 2 to 5 | 1 to 15 | 2 to unlimited | Not applicable | Not applicable |
| Statutory Audit | Compulsory | Compulsory | Dependent | Not Compulsory | Not Compulsory |
| Foreign Direct Investment | Yes | No | Yes | No | No |
| Annual Filings | Income Tax Returns with the ROC | Income Tax Returns with the ROC | Filed with the ROC | Filed with the ROC | Filed with the ROC |
| Ownership Transferability | Yes | Yes | Yes | No | No |
| Rate of tax | Moderate | Moderate | High | High | Low |
