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Private Limited vs LLP vs OPC
Answer five questions to see which structure fits your business, then compare all three side by side.
| Factor | Private Limited | LLP | One Person Company |
|---|---|---|---|
| Minimum owners | 2 shareholders and 2 directors | 2 partners (2 designated partners) | 1 member and a nominee |
| Maximum owners | 200 shareholders | No limit | 1 member |
| Liability | Limited to share capital | Limited to agreed contribution | Limited to share capital |
| Raising equity funding | Easiest: angels and VCs prefer it | Not possible to issue shares | Must convert first |
| ESOPs | Yes | No | No (until converted) |
| Income tax | 22% + surcharge and cess (25.17%) under section 115BAA | 30% + cess (surcharge above ₹1 crore) | Same as a private company |
| Tax on profit paid out | Dividend taxed again in owners' hands | Profit share tax-free for partners | Dividend taxed again |
| Statutory audit | Always required | Only if turnover above ₹40 lakh or contribution above ₹25 lakh | Always required |
| Annual ROC filings | AOC-4, MGT-7A or MGT-7, DIR-3 KYC, ADT-1 | Form 8 and Form 11 | AOC-4, MGT-7A |
| Board meetings | At least 4 a year | Not required | At least 2 a year (1 in each half) |
| Foreign investment | Allowed under the automatic route in most sectors | Allowed where 100% automatic route applies | NRIs can form one; FDI limited |
| Compliance cost | Highest | Lower | Medium |
Choose a private limited company if you will raise funding
Investors buy shares, and only a company can issue them. A private limited company also lets you create an ESOP pool and is the structure banks and large customers trust most. It costs more to run, with a statutory audit and several ROC filings every year.
Choose an LLP for low compliance
An LLP gives partners limited liability with fewer filings, and an audit only once turnover passes ₹40 lakh or contribution passes ₹25 lakh. Partners can take out profits without dividend tax. It cannot raise equity, so it suits consultancies, professional firms and family businesses.
Choose an OPC if you are a solo founder
A one person company gives a single founder limited liability and a company structure, with a nominee named at incorporation. One person can form only one OPC. It can convert to a private limited company whenever you add shareholders.
Tax at a glance
Companies opting for section 115BAA pay 25.17% including surcharge and cess. LLPs pay 30% plus cess, with surcharge above ₹1 crore, but partners’ profit share is not taxed again.