Question
Proprietorship, LLP or private limited — which should I choose?
Answer
Bottom line: A proprietorship is simplest, while an LLP or private limited company gives limited liability and better funding access.
1. Liability
A proprietor has unlimited personal liability; an LLP limits it to the agreed contribution; a company is a separate legal entity with limited liability.
2. Tax
Proprietorship is taxed at slab rates; an LLP at 30%; a company at 22% (under 115BAA) or 30%, with dividends taxed again in shareholders' hands.
3. Compliance and funding
A company faces audit and ROC filings from year one but is best for raising equity; a proprietorship is lightest to run.
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This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.