Welcome to Taxtoday Consultancy Pvt. Ltd.

+91 70917 98080

We are 24x7

info@taxtoday.biz

You can mail us

Company Registration Online

Choosing the right corporate structure for your business is just as important as any other business-related activity. With the right business structure, your company can run efficiently and achieve the business goals you need. In India, all companies must register as part of their compliance. Before learning how to register a company, let's understand the types of business structures in India.

Comparative List of Different Types of Business Structures in India


Here is a comparative list of the popular business structures in India.

Company type Ideal for Tax advantages Legal compliances
Limited Liability Partnership Service-oriented businesses or businesses that have low investment needs Benefit on depreciation Business tax returns to be filed ROC returns to be filed
One Person Company Sole owners looking to limit their liability Tax holiday for first 3 years under Startup India Higher benefits on depreciation No tax on dividend distribution Business returns to be filed Limited ROC compliance
Private Limited Company Businesses that have a high turnover Tax holiday for first 3 years under Startup India Higher benefits on depreciation Business tax returns to be filed ROC returns to be filed An audit is mandatory
Public Limited Company Businesses with a high turnover Tax exemptions under Business tax returns to be filed. Mandatory Audits
One Person Company (OPC)

Recently introduced in the year 2013, an OPC is the best way to start a company if there exists only one promoter or owner. It enables a sole-proprietor to carry on his work and still be part of the corporate framework.

Limited Liability Partnership (LLP)

A separate legal entity, in an LLP the liabilities of partners are only limited only to their agreed contribution. An LLP is established under the Limited Liability Act, 2008 with the Registrar of Companies (ROC).

Private Limited Company (PLC)

A PLC in the eyes of the law is regarded as a separate legal entity from its founders It has shareholders (stakeholders) and directors (company officers). Each individual is regarded as an employee of the company.

Public Limited Company

A Public Limited Company is a voluntary association of members which is incorporated under company law. It has a separate legal existence and the liability of its members are limited to shares they hold.

You can choose what business structure suits your business needs best and accordingly register your business.

Other forms of business structures include Sole proprietorship, Hindu Undivided Family, and Partnership firms. Please bear in mind, these structures do not come under the ambit of company law.

Why is it important to choose the right business structure?

Choosing the right corporate structure for your business is just as important as any other business-related activity. With the right business structure, your company can run efficiently and achieve the business goals you need. In India, all companies must register as part of their compliance. Before learning how to register a company, let's understand the types of business structures in India.

Your company account should be audited annually. Compliance with these legal requirements requires spending money on auditors, bookkeepers, and tax filing professionals. Therefore, when registering a company, it is important to choose the right company structure. Entrepreneurs need a clear understanding of what legal compliance they are trying to address.

Some corporate structures are relatively investor-friendly than others, but investors always prefer a recognized and legitimate corporate structure. For example, investors may be reluctant to give money to a sole proprietor. On the other hand, investors can make their investments more comfortable if they have a good business idea backed by a recognized legal structure (LLP, company, etc.).