Business structures in India and their comparison

While selecting the business entity, we are in dilemma which is best for us. We have elaborated the differences between the structures available.

Here's the difference between the Business structures in India;

27/11/2017

Basics	Private Limited	Partnership(not allowed for foreigners)	LLP	One Person company	Sole Proprietorship(not  allowed for foreigners)	Branch office	Project Office
Registration	Private Limited Company will be registered with the Ministry of Corporate Affairs under the Companies Act, 2013.	Partnership can be registered  or unregistered. Registration  of Partnership is optional.  If registered, Partnership is registered under the Partnership Act, 1932	LLP will be registered with the Ministry of Corporate  Affairs under the Limited  Liability Partnership Act,  2008.	One Person Company will be registered with  the Ministry of Corporate Affairs  under the Companies  Act, 2013.	no formal registration	Prior approval from RBI is  mandatory for opening a branch office	Foreign companies planning to execute specific projects in India can set up a temporary project/site offices in India for carrying out activities only relating to that project. The Government of India has now granted general permission to foreign entities to establish project offices subject to specified conditions.
Name of the Entity	The choice of name provided by the Promoter must be approved by the Registrar of Company. Only names that are not identical / similar to an existing company or LLP name and names that are not offensive or illegal would be  allowed. The name of the entity will end with the words“Private Limited Company”.	The Promoters choice of  name can be used for the Partnership. No approval is necessary for using name;  however, it is good to avoid trademarked names.	The choice of name  provided by the Promoter must be approved by the Registrar of Company. Only names that are not identical / similar to an existing company or LLP name and names that are not offensive or illegal would be allowed. The name of the entity will end with the words “Limited Liability Partnership” or “LLP”.	The choice of name provided by the Promoter must be  approved by the Registrar of Company. Only names that are not identical / similar to an existing company or LLP name and names that are not offensive or illegal would be allowed. The name of the entity will end with the words“OPC” or “One Person Company”.	The Promoter’s choice of name can be used for the Proprietorship. No approval is necessary for using name; however, it is good to avoid  trademarked names.	The Promoters choice of name can be used for the Branch office. No approval is necessary for using name; however, it is good to avoid trademarked names.	The Promoters choice of  name can be used for the Project office. No approval is necessary for using name; however, it is good to avoid trademarked names.
Legal Status of Entity	Private Limited Company is a separate legal entity registered under the Companies Act, 2013. The Directors and Shareholders of a Private Limited Company are  not personally liable for the liabilities of the Company.	Partnership is not recognised as a separate legal entity and the promoters are personally liable for the liabilities of the partnership.	Limited Liability upto the paid up value of Contribution	One Person Company is a separate legal entity registered under the Companies Act, 2013. The Director and Nominee Director of a One Person Company are not personally liable for the liabilities of the Company.	Proprietorship is not recognised as a separate legal entity and the promoter is personally liable for the liabilities of the Proprietorship.	A branch office is not a separate legal entity of the parent corporation.	A project office is not a separate legal entity of the parent corporation.
Member(s) Liability	Shareholders have limited liability and is liable only to the extent of their share capital.	Partners have unlimited liability and is responsible for all the liabilities of the Partnership.	Partners have limited liability and is liable only to the extent of their contribution to the LLP.	Director and Nominee Director have limited liability and is liable only to the extent of his/her share capital.	Proprietor has unlimited liability and is responsible for all the liabilities of the Proprietorship.
Minimum Number of Members	A minimum of two persons are required to start a Private Limited Company.	A minimum of two persons are required to start a Partnership	A minimum of two persons are required to start a LLP.	A minimum of two persons are required to start a One Person Company, viz. Director and Nominee Director.	Can have only one person as member.	Can have only one person as member.	Can have only one person as member.
Maximum Number of Members	A Private Limited Company	The maximum number	A LLP can have unlimited	A One Person Company	Can have only one	There is no Criteria for	There is no Criteria for
	can only have a maximum of 200 shareholders or members.	of partners can be only 20.	number of Partners	can have only two people, viz. Director and Nominee Director.	person as member.	maximum no. of members	maximum no. of members
Foreign Ownership	Foreigners are allowed to	Foreigners are not	Foreigners are allowed to	Foreigners are not allowed to go for OPC as Director and Nominee	Foreigners are not	Foreigners are allowed to	Foreigners are allowed to
	invest in a Private Limited Company under the Automatic Approval route in most sectors. Need to check FDI Policy	allowed to start a Partnership.	invest in a LLP but post registration RBI Compliances are required and FdI Policy to be checked	Director cannot be Foreigners.	allowed to start a Proprietorship	open a branch office in India subject to some eligibility criteria	open a Project office in India subject to some eligibility criteria
Transferability	Ownership can be transferred by way of share transfer.	Not transferable.	Ownership can be  transferred.	Ownership can be transferred.	Not transferable.	Branch office can transfer its assets to its wholly owned subsidiary or Joint Venture or Others in India	Project office can transfer its assets to its wholly owned subsidiary or Joint Venture or Others in India
Existence or Survivability	Existence of a Private Limited Company is not dependent on the Directors or Shareholders. Could be dissolved only voluntarily or by Regulatory Authorities.	Existence of a Partnership business is dependent on the Partners. Could be up for dissolution due to death of a Partner.	Existence of a LLP is not dependent on the Partners. Could be dissolved only voluntarily or by an Order of the Company Law Board.	Existence of a One Person Company is not dependent on the Director or Nominee Director. Could be dissolved only voluntarily or by Regulatory Authorities.	Existence of a Proprietorship business is dependent on the Proprietor.	Existence of a Branch office is not dependent on the Director or Nominee Director. Could be dissolved only voluntarily or by Regulatory Authorities	Existence of a Project office is not dependent on the Director or Nominee Director. Could be dissolved only voluntarily or by Regulatory Authorities
Taxation	Private Limited Company profits are taxed at 30% plus surcharge and cess as applicable.	Partnership profits are taxed at 30% plus surcharge and cess as applicable.	LLP profits are taxed at30% plus surcharge and cess as applicable.	One Person Company profits are taxed at 30% plus surcharge and cess as applicable.	Taxed as individual, based on the total income of the Proprietor.	Taxed as individual, based on the total income of the member.	Taxed as individual, based on the total income of the member.
Annual Statutory Meetings	Board and General Meetings must be conducted periodically.	No requirements to conduct annual statutory meetings	No requirements to conduct annual statutory meetings	No requirements to conduct annual statutory meetings	No requirements to conduct annual statutory meetings.	No requirements to conduct annual statutory meetings.	No requirements to conduct annual statutory meetings.
Annual Filings	Private Limited Company must file Annual Accounts and Annual Return with the Registrar of Companies each year. Income Tax Return must also be filed for the Private Limited Company.	No requirements to file	LLP must file Annual	One Person Company must	No requirements to file	Every year a branch	No requirements to file
		annual report with Registrar of Companies. Income Tax Return must be filed for the Partnership.	Statement of Accounts & Solvency and Annual Return with the Registrar each year. Income Tax Return must also be filed for the LLP. In case of delay there would be penalty of Rs. 100 each day of default	file Annual Accounts and Annual Return with the Registrar of Companies each year. Income Tax Return must also be filed for the One Person Company.	annual report with Registrar of Companies. Income Tax Return must be filed based on the income of the Proprietorship.	office is required to undertake the annual activities like:	annually
						Maintenance of Books of Account, Getting Annual Accounts audited,Filling of Annual Activity, Certificate with RBI,Filling of Annual Return and Balance sheet with Registrar of Companies,Intimating any change in constitution of Foreign Company to RBI & ROC,Intimating any change in Directors of Foreign Company to RBI & ROC,Intimating each and every change in the BRANCH office to RBI & ROC,No additional place of business can be started unless approval is taken from RBI.