Compare
Private limited, OPC or LLP: the honest comparison
The three entities most people choose between, on the points that decide it: who can own it, what it must file, when an audit is compulsory, how it is taxed and how it is closed. No plan names, no add-ons. The prices are live from the same list every page uses.
Pvt Ltd
Private limited company registration
Investors, ESOPs, a team that will grow.
From Rs. 3,999
plus government fees
OPC
One person company registration
One founder who wants limited liability.
From Rs. 3,999
plus government fees
LLP
Limited liability partnership registration
Partners running a service business.
From Rs. 3,999
plus government fees
Professional fee before GST at 18 percent. Government fees and stamp duty depend on your state and are added in the estimator.
Side by side
Every point that decides it, in one table.
| Factor | Private limited company | One person company | Limited liability partnership |
|---|---|---|---|
| Governing law and regulator | Companies Act, 2013 and the Ministry of Corporate Affairs (MCA) | Companies Act, 2013 and the Ministry of Corporate Affairs (MCA) | LLP Act, 2008 and the Ministry of Corporate Affairs (MCA) |
| Minimum members | 2 shareholders and 2 directors; the same people can be both | 1 shareholder, 1 director and 1 nominee of the sole member; shareholder and director can be the same person | At least 2 partners, of whom 2 must be designated partners |
| Books of accounts | Mandatory | Mandatory | Mandatory |
| Statutory records | Minutes of board meetings (at least 4 a year) and general meetings; share register and share certificates; statutory registers | Share certificates; statutory registers; minutes of resolutions | Optional; minutes of partner meetings |
| Board meetings | First meeting within 30 days of incorporation; at least 4 a year with not more than 120 days between two meetings | None if the company has only one director; otherwise one in each half of the calendar year with at least 90 days between them | No compulsory meetings; partners meet for events such as admitting a partner or changing the objects of the LLP |
| Annual general meeting | Mandatory | Not required | Not applicable |
| Annual ROC filings | Financial statements (balance sheet, profit and loss, cash flow, changes in equity) in AOC-4; annual return in MGT-7 | Financial statements in AOC-4 (no cash flow statement); annual return in MGT-7A | Statement of account and solvency in Form 8; annual return in Form 11 |
| Annual tax filings | Mandatory; income tax return in ITR-6 | Mandatory; income tax return in ITR-6 | Mandatory; income tax return in ITR-5 |
| Statutory audit | Compulsory, no turnover limit | Compulsory, no turnover limit | Not compulsory if turnover is up to Rs. 40 lakh and contribution is up to Rs. 25 lakh |
| Change of name, address or objects | Filing with ROC; Central Government approval in some cases | Filing with ROC; Central Government approval in some cases | Filing with ROC |
| Conversion | Can convert into an OPC or a public company by special resolution and filing with ROC. The earlier paid-up capital (Rs. 50 lakh) and turnover (Rs. 2 crore) limits for conversion into an OPC were removed from 1 April 2021. | Can convert into a private or public company at any time. Compulsory conversion on crossing Rs. 50 lakh paid-up capital or Rs. 2 crore average turnover was removed from 1 April 2021. | Filing with ROC. Can register as a company under section 366 of the Companies Act, 2013 through a separate process. |
| Closure | Voluntary by shareholders, by creditors, or by order of the Tribunal; strike off under section 248 where eligible | Voluntary by the shareholder, by creditors, or by order of the Tribunal; strike off under section 248 where eligible | Voluntary by partners, by creditors, or by order of the Tribunal; strike off in Form 24 where eligible |
| Taxation | 25% where turnover is up to Rs. 400 crore, or 22% under section 115BAA, plus surcharge and cess | 25% where turnover is up to Rs. 400 crore, or 22% under section 115BAA, plus surcharge and cess | 30% plus surcharge and cess |
| Fund raising options | High | Low | Low |
| Compliance cost | High | Medium | Medium |
| Recommended for | Startups and growing companies | Sole promoters | Professional services firms |
| Ease of accommodating investment | Very easy | Possible, but unlikely | Possible, but unlikely |
| Tax advantages | Few benefits | Few benefits | Few benefits |
| Perpetual existence | Yes | Yes | Yes |
Facts as per the Companies Act, 2013, the LLP Act, 2008 and the Income-tax Act as in force. Conversion limits for an OPC were removed from 1 April 2021.
What we tell people
Our rule of thumb
If investors or ESOPs are anywhere in the plan, register a private limited company. Funds buy shares, and only a company has them. Every other choice ends in a conversion before the first round.
If two or more partners are running a service business on their own money, an LLP fits. Fewer meetings, no audit below the turnover and contribution limits, and the profit is taxed once.
If one founder is testing an idea, start with an OPC, or with a proprietorship if liability is not a worry yet. Converting later is possible. It is a resolution, a set of forms and a filing, and it costs about what a registration costs.
Still not sure? Answer six questions in Which entity, or see what each one costs all-in in your state with the cost estimator.
Questions
Asked before, answered once.
Can an LLP take investment from a venture fund?
In practice, no. Funds buy shares, and an LLP has partners and capital contribution instead of shares. ESOPs do not work in an LLP either. If a fund or an ESOP pool is anywhere in the plan, start with a private limited company or convert before the round.
Is an OPC cheaper to run than a private limited company?
Somewhat. An OPC skips the annual general meeting and, with one director, the board meetings. It still needs a statutory audit, AOC-4, MGT-7A, the income tax return and director KYC. The saving is in meetings and minutes, not in filings.
Which one pays less tax?
A company pays 25 percent where turnover is up to Rs. 400 crore, or 22 percent under section 115BAA, plus surcharge and cess. An LLP pays 30 percent plus surcharge and cess, but its partners are not taxed again on the profit share. Which is lower depends on how much profit stays in the business. Ask before you decide on tax alone.
Can I change my mind later?
Yes. A private limited company can become an OPC or a public company, an OPC can become a private or public company, and an LLP can register as a company under section 366. Each route is a resolution, a set of forms and a filing, and costs about what a fresh registration costs. Picking right the first time is cheaper, but a wrong pick is not permanent.
Tell us what you are starting.
You get the entity we would pick for you, the all-in price for your state and the list of documents the same day. Then you decide.