You get a ranked recommendation with the reasons behind it, the income tax each structure would pay on your profit and a side-by-side comparison of liability, compliance and audit rules.
How the recommendation is scored
Fit score = Compliance simplicity + Funding fit + ESOP fit + Liability protection + Tax efficiency
- Funding fit
- Only companies can issue equity shares to investors
- Liability
- Pvt Ltd, OPC and LLP protect personal assets
- Compliance
- Proprietorships are simplest; companies have the most filings
- Tax
- Tax on your profit compared across structures
Companies pay 25.17% (22% plus surcharge and cess under the concessional regime). LLPs and partnership firms pay 31.2%, or 34.94% above ₹1 crore. Proprietors pay individual slab rates, which are lower on smaller profits but rise to 30%.
Company profits are taxed again as dividends when distributed, while LLP profit shares are tax free for partners. The score is a guide; your exact situation, industry licences and exit plans also matter.
Can you change structure later?
Yes, but it costs time and money, so it pays to start right.
- A proprietorship or partnership can be converted into a company or LLP, but contracts, licences and bank accounts must move too.
- An OPC can convert into a Private Limited Company when you add shareholders.
- An LLP can convert into a company if you later decide to raise equity funding.
- Startup India (DPIIT) recognition is available to companies, LLPs and registered partnerships, not proprietorships.