Neutral comparison of Proprietorship, LLP, and Pvt Ltd frameworks for Indian entities.
Recommended Structure
Based on your preferences for single ownership, self funding, and unlimited liability.
Ownership
Single Founder
Funding
Bootstrapped
Liability
unlimited
Recommended
Legal Status
Not a separate entity; tied to the owner's PAN.
Owner Liability
Unlimited. Owner is personally liable for all debts.
MCA Audit
Tax audit may apply if turnover exceeds ₹1 Cr (or ₹10 Cr when digital transactions exceed 95%).
Compliance
Low. Limited to individual tax and GST (if registered).
Fundraising
Difficult. Cannot issue equity shares to investors.
Legal Status
Separate legal entity; registered with MCA.
Owner Liability
Limited to the extent of capital contribution.
MCA Audit
Audit required if turnover exceeds ₹40L or capital contribution exceeds ₹25L.
Compliance
Moderate. Annual ROC filings (Form 8 & 11).
Fundraising
Limited. Partners can be added, but no equity share logic.
Legal Status
Separate legal entity; registered with MCA.
Owner Liability
Limited to the value of shares held.
MCA Audit
Statutory Audit is mandatory every year regardless of turnover.
Compliance
High. Frequent board meetings, ROC filings, and auditors.
Fundraising
Excellent. Ideal for raising Venture Capital via equity.