How to Choose the Right Business Structure: LLP vs. Pvt Ltd vs. Sole Proprietorship
Starting a business in India involves a crucial first step—selecting the right legal structure. The choice impacts taxation, compliance, liability, and growth potential. The three most common business structures are: .Sole Proprietorship . Limited Liability Partnership (LLP) . Private Limited Company (Pvt Ltd) Each has distinct advantages and limitations. This guide compares them to help startup founders, small business owners, and freelancers make an informed decision. 1. Sole Proprietorship Key Features Ownership: Single owner (individual). Legal Status: No separate legal identity from the owner. Registration: No formal registration required (except for GST/MSME if applicable). Liability: Unlimited liability (personal assets at risk). Taxation Income is taxed as individual income under the owner’s PAN. No corporate tax; only IT slab rates apply. Best For Freelancers, consultants, and small home-based businesses. Low-risk ventures with minimal compliance...