Private Limited vs LLP vs OPC: Which Structure Should You Pick?

Indian founders typically choose between three legal structures: Private Limited Company (Pvt Ltd), Limited Liability Partnership (LLP), and One Person Company (OPC). The "right" answer depends almost entirely on whether you plan to raise institutional capital and how much compliance overhead you can live with.

Private Limited Company (Pvt Ltd)

The default structure for any business that plans to take outside investment.

• Owners: 2 to 200 shareholders, 2 to 15 directors.
• Capital: Minimum authorised capital ₹1 lakh. Equity is share-based, transferable with restrictions.
• Compliance: Annual ROC filings, board meetings (4/year minimum), AGM, statutory audit. Cost: ₹15,000–₹40,000/year via a CS, plus auditor fees.
• Tax: 22% corporate tax (under Section 115BAA, no exemptions) or 25% with exemptions. Dividends taxed in shareholders' hands.
• Funding: Easy to issue equity, ESOPs, preference shares, convertibles. The structure VCs expect.

Pick this if you plan to raise institutional capital, issue ESOPs, or build something that might be acquired. The compliance overhead is real but predictable.

Limited Liability Partnership (LLP)

Lower compliance overhead, partnership-style flexibility, but limited capital-raising options.

• Owners: Minimum 2 partners, no upper limit. At least 2 designated partners required.
• Capital: No minimum capital requirement; capital contribution flexible.
• Compliance: Annual return + statement of accounts. Audit only required if turnover > ₹40 lakh or contribution > ₹25 lakh. Cost: ₹5,000–₹15,000/year.
• Tax: 30% on income (plus surcharge and cess). Profits distributed to partners are tax-free in their hands (taxed once at the LLP level).
• Funding: Cannot issue equity or ESOPs. External investors typically can't invest in LLPs the way they can in Pvt Ltds.

Pick this if you are building a services business, consultancy, or any company you don't expect to take VC money. Two professionals starting an architecture practice or a chartered accountancy firm — LLP is the right call.

One Person Company (OPC)

Designed for solo founders who want corporate-grade limited liability without partners.

• Owners: Exactly 1 shareholder. 1 director minimum.
• Capital: Minimum authorised capital ₹1 lakh.
• Compliance: Lighter than Pvt Ltd — no AGM required, fewer board meetings (2/year). Statutory audit still required.
• Tax: Same as Pvt Ltd — 22% or 25%.
• Funding: Can convert to a Pvt Ltd later but must do so within 6 months once paid-up capital exceeds ₹50 lakh or turnover exceeds ₹2 crore.
• Restriction: Cannot conduct NBFC, financial-investment, or non-banking activities.

Pick this if you are a solo founder who wants limited liability now and has decided to live without partners or external capital — at least for the foreseeable future.

Decision framework

1. Will you raise institutional capital? If yes → Pvt Ltd. Don't try to raise on an LLP; you'll convert anyway and lose months.
2. Are you 2+ founders building a services business with no funding plans? → LLP.
3. Are you 1 founder building something you might fund later? → OPC initially, with a clear plan to convert when needed.
4. Are you a freelancer testing a business idea? → Skip incorporation entirely. Operate as a proprietor under your PAN until revenue justifies the compliance overhead.

What it actually costs

Indicative end-to-end professional fees in 2026 (DSC, DIN, name approval, MoA/AoA drafting, filing):

• Pvt Ltd: ₹8,000–₹15,000 government fees + ₹5,000–₹15,000 professional fees.
• LLP: ₹3,000–₹5,000 government fees + ₹3,000–₹8,000 professional fees.
• OPC: similar to Pvt Ltd, ₹8,000–₹15,000 government + ₹5,000–₹10,000 professional.

The mistake to avoid

Picking a structure based on what's cheapest to incorporate, not what fits your trajectory. We have seen LLPs forced to convert to Pvt Ltds at the worst possible moment (mid-fundraise) because the founder optimised for ₹3,000 in setup costs and lost six months of momentum to the conversion.

If there is a real chance you'll raise capital one day, start as a Pvt Ltd. The annual compliance is the cheapest insurance you'll buy.