Selecting a right kind of Business Entity before starting your business in India

Points of ComparisonPrivate Limited CompanyLimited Liability Partnership (LLP)One Person Company (OPC)Partnership FirmSole Proprietorship Firm

Suitable for
Persons who have a definite plan and vision and are looking for a prospective investors to fund their project.Venture is an experiment and the founders are not sure about the growth of the venture.One individual who has a well-defined business plan and is looking to start a small venture but he is sure that it will grow as the venture growsWhere two or more persons want to run their Venture locally in a specific area onlyA person who wants to experiment with the venture and want to get an idea about the market potential.
Registration Time*5 to 10 working days5 to 10 working days5 to 10 working daysNot Compulsory but advisable 7-10 daysNo registration required as such.
Minimum People required2 Shareholders & 2 Directors (Can be same persons)2 Partners1 Shareholders & 1 Directors (Can be same persons)2 Partners1 Person
Minimum CapitalNo minimum capital Requirement. (Can be started with even INR 1000/-

No minimum capital Requirement. (Can be started with even INR 1000/-No minimum capital Requirement. (Can be started with even INR 1000/-No minimum capital Requirement. (Can be started with even INR 1000/-No minimum capital requirement.

Personal Liability
Shareholders and directors are not personally liable for the acts of the company but can be fined and/or imprisoned in their official capacityPartners are not personally liable for the acts of the LLP but can be fined and/or imprisoned in their official capacityShareholder not personally liable for the acts of the company but can be fined and/or imprisoned in his official capacityPartners shall be personally liable for the acts of the firm.Personally Liable
Statutory CompliancesSubstantial 
Compliance
Lesser
Compliance
Substantial
 Compliance
Practically 
no compliance
Practically 
no compliance

Investors Perspective
Most preferred and shows seriousness of founders.Less PreferredNot Applicable unless converted into a Private Limited CompanyNot ApplicableNot Applicable
Cost of maintainingHigherRelatively LesserHigher NominalVery Nominal
Appointment of AuditorsCompulsoryOnly when Turnover/Gross Receipts exceed the prescribed limit i.e. 40 lakhCompulsoryNo RequirementNo Requirement