Business setup
Detailed Comparison of Business Entities in India
Compare all 6 business structures with complete details on mandatory requirements, costs, compliance, and annual forms required to operate legally in India.
Sole Proprietorship
₹500–₹2K- Registration
- GST / Shop Act
- Capital
- No minimum
- Liability
- Unlimited
- Compliance
- Low
Partnership
₹8K–₹12K- Registration
- Partnership Deed
- Capital
- No minimum
- Liability
- Unlimited (joint)
- Compliance
- Low–Medium
LLP
₹15K–₹25K- Registration
- MCA (FiLLiP)
- Capital
- No minimum
- Liability
- Limited
- Compliance
- Medium
One Person Company
₹15K–₹25K- Registration
- MCA (SPICe+)
- Capital
- No minimum
- Liability
- Limited
- Compliance
- Medium
Private Limited
₹20K–₹40K- Registration
- MCA (SPICe+)
- Capital
- No minimum
- Liability
- Limited
- Compliance
- High
Public Limited
₹50K+- Registration
- MCA (SPICe+)
- Capital
- No minimum
- Liability
- Limited
- Compliance
- Very High
Best For
Solo entrepreneurs starting their first business
Registration Time
3–7 days (GST only if applicable)
Taxation
Your personal income tax slab rates (up to 30% plus surcharge and cess)
Capital Required
No minimum — you decide
Mandatory Requirements
- Single owner (you are the business)
- No separate legal entity
- GST registration once turnover crosses ₹40 lakh for goods or ₹20 lakh for services (lower in some states), or for inter-state supply of goods
- PAN in your name
- Shop & Establishment Act registration (varies by state)
- No separate bank account required but highly recommended
- TAN needed only if you must deduct TDS (generally once last year's turnover crossed the tax audit limit)
- No MOA/AOA required
Annual Forms & Compliance
| Form | Purpose | Due |
|---|---|---|
| ITR-3 / ITR-4 | Individual return for business income | 31 August (non-audit) / 31 October (audit) |
| GSTR-1 & GSTR-3B | Monthly/Quarterly filings (if GST registered) | 11th & 20th of next month |
| Books of Accounts | Required once income or turnover crosses the Income-tax Act limits | Maintained throughout the year |
| TDS returns (Forms 138/140, formerly 24Q/26Q) | Quarterly, if you deduct TDS | 31 Jul, 31 Oct, 31 Jan, 31 May |
| Tax audit report | If turnover exceeds ₹1 crore (₹10 crore with minimal cash) or professional receipts exceed ₹50 lakh | 30 September |
Best For
Small professional practices and family-run businesses with 2 to 50 partners who trust each other
Registration Time
7–15 days (unregistered firm can start immediately)
Taxation
Taxed at 30% (plus surcharge/cess); partners are not taxed again on profit share
Capital Required
No statutory minimum — set by the partnership deed
Mandatory Requirements
- Partnership deed on stamp paper (value varies by state)
- PAN application in the firm's name (Form 49A)
- Registration with the Registrar of Firms (optional but recommended for legal standing)
- GST registration if turnover crosses the threshold or for inter-state sales
- Current bank account opened with the deed and PAN
- MSME/Udyam registration if seeking benefits under government schemes
Annual Forms & Compliance
| Form | Purpose | Due |
|---|---|---|
| ITR-5 | Income tax return for the firm | 31 August (non-audit) / 31 October (audit) |
| GSTR-1 & GSTR-3B | Monthly/quarterly GST returns | 11th & 20th of next month |
| TDS returns (Forms 138/140, formerly 24Q/26Q) | Quarterly TDS on salaries/payments | 31 Jul, 31 Oct, 31 Jan, 31 May |
| Tax audit report (section 63, formerly 44AB) | If turnover exceeds ₹1 crore (₹10 crore with minimal cash) | 30 September |
Best For
Professional service firms and growing businesses that want limited liability without company-formalities
Registration Time
15–25 days
Taxation
30% (plus surcharge/cess); no dividend distribution tax or MAT credit issues
Capital Required
No minimum contribution — agreed in the LLP agreement
Mandatory Requirements
- Digital Signature Certificate (DSC) for designated partners
- Director Identification Number (DIN) for each designated partner
- Name reservation via FiLLiP (RUN-LLP) on the MCA portal
- Incorporation via FiLLiP with LLP agreement and subscriber sheet
- LLP agreement filed within 30 days of incorporation (Form 3)
- GST registration if applicable to the business activity
Annual Forms & Compliance
| Form | Purpose | Due |
|---|---|---|
| Form 8 | Annual statement of accounts and solvency | 30 October |
| Form 11 | Annual return of the LLP | 30 May |
| ITR-5 | Income tax return | 31 August (non-audit) / 31 October (audit) |
| Audit of accounts | Mandatory if turnover > ₹40 lakh or contribution > ₹25 lakh | Before Form 8 is filed |
| GSTR-1 & GSTR-3B | Monthly/quarterly GST returns | 11th & 20th of next month |
Best For
Solo founders who want a separate legal entity and limited liability
Registration Time
12–20 days
Taxation
Same as a company: 22% under the concessional regime (about 25.17% with surcharge and cess), or 25%/30% under the normal regime
Capital Required
No statutory minimum; paid-up capital declared at incorporation
Mandatory Requirements
- DSC and DIN for the sole director
- Name reservation via SPICe+ (Part A) on the MCA portal
- Incorporation via SPICe+ (Part B) with MOA and AOA
- Nominee consent (Form INC-3) — nominee takes over on the director's death
- PAN and TAN are issued automatically with incorporation
- GST registration if the business activity is covered
Annual Forms & Compliance
| Form | Purpose | Due |
|---|---|---|
| Form AOC-4 | Financial statements | 180 days from financial year end |
| Form MGT-7A | Annual return (small company format) | 60 days from the date the AGM would have been due |
| ADT-1 | Auditor appointment (mandatory) | 15 days from appointment |
| ITR-6 | Income tax return | 31 October |
| GSTR-1 & GSTR-3B | Monthly/quarterly GST returns | 11th & 20th of next month |
Best For
Startups and growing businesses that may raise funding or issue ESOPs
Registration Time
15–25 days
Taxation
22% under the concessional regime (about 25.17% with surcharge and cess), or 25%/30% under the normal regime, where MAT applies
Capital Required
No legal minimum (practical: ₹1 lakh+)
Mandatory Requirements
- DSC and DIN for each director (minimum 2 directors, 1 resident in India)
- Name reservation via SPICe+ (Part A) on the MCA portal
- Incorporation via SPICe+ (Part B) with MOA and AOA
- Share certificate issuance and statutory registers from day one
- PAN and TAN issued with incorporation; EPFO and ESIC registration through AGILE-PRO-S
- GST registration if the business activity is covered
- Bank account opened with the Certificate of Incorporation
Annual Forms & Compliance
| Form | Purpose | Due |
|---|---|---|
| Form AOC-4 | Financial statements | 30 days from AGM |
| Form MGT-7 / MGT-7A | Annual return | 60 days from AGM |
| ADT-1 | Auditor appointment | 15 days from AGM |
| DIR-3 KYC | Annual KYC for every director | 30 September |
| DPT-3 | Return of deposits/loans | 30 June |
| ITR-6 | Income tax return | 31 October |
| GSTR-1 & GSTR-3B | Monthly/quarterly GST returns | 11th & 20th of next month |
Best For
Larger businesses that want to raise capital from many shareholders, or plan to list on a stock exchange
Registration Time
20–30 days
Taxation
Same as a private company: 22% under the concessional regime (about 25.17% with surcharge and cess), or 25%/30% under the normal regime
Capital Required
No statutory minimum paid-up capital
Mandatory Requirements
- Minimum 7 shareholders (a private company needs only 2)
- Minimum 3 directors; at least 1 must be resident in India
- Independent directors and audit committee once the Companies Act thresholds apply
- Whole-time Company Secretary once paid-up capital reaches ₹10 crore, and for all listed companies
- At least four board meetings a year, with no more than 120 days between two meetings
- Listing is optional; listed companies must also follow SEBI rules, including minimum public shareholding
- DSC and DIN for all directors
Annual Forms & Compliance
| Form | Purpose | Due |
|---|---|---|
| Form AOC-4 | Financial statements | 30 days from AGM |
| Form MGT-7 | Annual return | 60 days from AGM |
| ADT-1 | Auditor appointment | 15 days from AGM |
| ITR-6 | Company income tax return | 31 October |
| GSTR-1 & GSTR-3B | Monthly/quarterly GST returns | 11th & 20th of next month |
| TDS returns (Forms 138/140, formerly 24Q/26Q) | Quarterly TDS on salaries/payments | 31 Jul, 31 Oct, 31 Jan, 31 May |
| Cost audit report (CRA-4) | Only for industries and turnover levels covered by the cost audit rules | 30 days from receiving the cost audit report |
| Quarterly results and shareholding pattern | Listed companies only, filed with stock exchanges | As per SEBI listing rules |
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