Choosing the right business structure is one of the first “founder decisions” that affects fundraising, compliance, taxes, and even how customers and partners perceive you. In India, most startups end up deciding between Private Limited (Pvt Ltd), LLP, and OPC.
Here’s a founder-friendly comparison.
1. Quick comparison at a glance
Private Limited (Pvt Ltd)
- Best for: VC-fundable startups, scalable teams, B2B credibility
- Strengths: Easy equity issuance, investor-friendly, strong brand trust
- Trade-off: Higher compliance vs LLP/OPC
LLP (Limited Liability Partnership)
- Best for: Services firms, bootstrapped businesses, consulting agencies
- Strengths: Lower compliance, flexible operations
- Trade-off: Equity/fundraising is not as smooth as Pvt Ltd
OPC (One Person Company)
- Best for: Solo founders starting small
- Strengths: Separate legal entity with one owner
- Trade-off: Not ideal once you add co-founders/investors
2. If you plan to raise funds, choose this
If you are building a venture-scale startup and anticipate angel/VC funding, Private Limited is usually the default. It’s easier to issue shares, onboard investors, and structure ESOPs.3. If you want low compliance and steady profits, choose this
If you’re bootstrapped, doing services/consulting, and want simpler governance, LLP often makes more sense. It’s still limited liability, but compliance is generally lighter than Pvt Ltd.4. If you’re solo today, but want to start right, choose this
If you’re a single founder and want a formal structure, OPC can work. But many founders skip OPC and incorporate directly as Pvt Ltd if they’re serious about building a team or raising capital.5. What founders usually forget
Incorporation is day one. Right after registration you’ll deal with:
- PAN/TAN and bank account steps
- GST decision (if applicable)
- Payroll + TDS compliance (once you hire)
- Contracts, invoices, basic accounting hygiene
Conclusion
- VC plan / ESOP / scaling team → Pvt Ltd
- Profitable services / simple ops → LLP
- Solo start / early validation → OPC