Proprietorship, LLP or Private Limited: Which Suits a Small Delhi Business?

Choosing a structure is one of the first decisions for a new business. Changing it later is possible, but costs time and money.

Proprietorship

Easiest and cheapest. One owner, no separate registration, minimal compliance. The owner is personally liable for business debts. Best for shops, freelancers and small traders.

Partnership firm

Two or more people under a deed. Simple to run, but partners carry unlimited liability for the firm's dues.

LLP

Partners' liability is limited to their contribution. Annual filings are required, yet compliance is lighter than a company. Good for professional and service firms that will not raise equity.

Private limited company

Separate legal identity, limited liability and the ability to issue shares to investors. Compliance is the heaviest: audit, board meetings and annual ROC filings. Preferred for startups, businesses seeking funding and those dealing with large corporates.

How to decide

• Planning to raise investment? Choose a company.
• Two or more owners wanting protection with less paperwork? Consider an LLP.
• Testing an idea alone? Start as a proprietor and convert when the business grows.

Tell us about your business plan and we will suggest the structure with reasons.

This article gives general information. Limits, rates and due dates change, so please confirm the current position for your case before acting.

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