The three entities every Indian founder chooses between — compared honestly across 14 dimensions, then a 5-question quiz that tells you which one fits your plan. No one-size-fits-all answers here.
| Dimension | Private Limited Company | LLP | OPC |
|---|---|---|---|
| Best suited for | Startups planning to raise capital; businesses with co-founders | Professional firms, consultants, family ventures wanting flexibility | Solo founders testing an idea before scaling |
| Minimum owners | 2 shareholders, 2 directors | 2 partners | 1 person |
| Ownership ceiling | 200 shareholders | No limit on partners | 1 only — must convert to Pvt Ltd if paid-up capital crosses ₹50L or average 3-yr turnover crosses ₹2cr |
| Incorporation cost (indicative) | ₹15,000–₹40,000 all-in with professional help | ₹10,000–₹25,000 | ₹12,000–₹30,000 |
| Time to incorporate | 7–14 working days typically | 7–14 working days typically | 7–14 working days typically |
| Annual compliance load | High — AOC-4, MGT-7, 4 board meetings, AGM, statutory audit | Light — Form 11 + Form 8; audit only above thresholds | Moderate — AOC-4, MGT-7A, 2 board meetings; no AGM |
| Statutory audit | Mandatory every year, whatever the turnover | Only if turnover > ₹40L or partner contribution > ₹25L | Mandatory every year |
| Raising equity funding | Yes — the standard, VC-ready vehicle; equity, preference, convertibles | Not possible — an LLP has no shares to issue | Not practical — convert to Pvt Ltd first |
| ESOPs for employees | Yes, straightforward | Not possible | Not practical |
| Tax on profits | ~25.17% effective under the concessional 115BAA regime (22% + surcharge + cess) | 30% + surcharge + cess (effective ~31.2% and up) | Same as Pvt Ltd (~25.17% under 115BAA) |
| Foreign investment | Allowed; automatic route in most sectors | Allowed with conditions and sectoral caps | Not permitted while it remains an OPC |
| Exit / sale of business | Clean — shares transfer; acquisition-ready | Partner exit via agreement; harder to sell as a whole | Convert first, then sell; limited standalone exit |
| Credibility with investors | Highest — what VCs and banks expect | Low for equity investors | Low until converted |
| Can it convert later? | Yes — to LLP or (if eligible) OPC; Pvt→Public for listing | Yes — LLP to company is permitted | Yes — and must, once the ₹50L / ₹2cr thresholds are crossed |
Indicative costs vary by state, authorised capital and professional fees. Tax figures are effective rates for FY 2025-26; your CA should confirm the regime that suits you.
Answer honestly. The recommendation explains its own reasoning, including what you'd give up.
If there is any chance you raise outside money, start as a Private Limited company. Converting later costs more than the compliance you "saved" — and investors discount converted entities.
An LLP is genuinely the right call for professional practices and partner-led businesses that will never issue shares. Lower compliance, flexible profit-sharing, no audit below thresholds.
An OPC is a starting block, not a destination. Perfect for validating solo, but the ₹50L capital / ₹2cr turnover conversion trigger arrives faster than founders expect. Plan the conversion before you need it.
Entity choice touches tax, fundraising and compliance for years. A 20-minute conversation now beats a restructuring later.
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