Different Types of Companies in India

Dec 4, 2024
Private Limited Company vs. Limited Liability Partnerships

Starting a business in India is an exciting and transformative journey, filled with opportunities to bring your ideas to life and create something impactful. However, one of the most crucial decisions you’ll face early on is choosing the proper business structure. Think of it as laying the foundation for your venture—get it right, and it supports your growth; get it wrong, and it could lead to unnecessary challenges down the line.

Each business type has its own advantages, legal responsibilities and operational requirements, making it essential to align your choice with your goals, resources and long-term vision.

In this blog, we’ll simplify the complexities, walking you through the different types of companies in India, their features, benefits and the documents required to get started.

Common types of companies in India and their classification

Table of Contents

What Are the Types of Business Entities?

India’s vibrant economy is home to diverse industries and entrepreneurial ambitions, necessitating a range of business entity options. From solo ventures to large-scale collaborations, the choice of business structure directly impacts a company's growth, legal compliance, tax obligations and operational efficiency.

There are different types of companies in India, ranging from individual ownership models to multi-member organisations, catering to various needs and scales. These include:

Types of Business Structures in India

India offers a variety of business structures to suit different entrepreneurial needs, scales and industries. Each structure has unique features, benefits and drawbacks, making it crucial to choose the right one based on your business goals. Let’s dive deeper into different types of businesses in India:

  1. Sole ProprietorshipA sole proprietorship is the simplest and most commonly adopted business structure in India, especially for small businesses or individual entrepreneurs. It is an unincorporated business owned and managed by a single person.
    Features:
    • No separate legal entity; the business is considered the same as the owner.
    • Unlimited liability: The owner's personal assets are at risk in case of debts.
    • Minimal compliance: Easy to set up and operate with fewer regulations.
  2. PartnershipA partnership is a business structure where two or more individuals share ownership, profits and responsibilities. It is governed by the Indian Partnership Act of 1932 and is ideal for businesses requiring diverse skill sets.
    Features:
    • Joint ownership and decision-making.
    • Unlimited liability for all partners unless specified otherwise in the partnership agreement.
    • No perpetual succession; the partnership dissolves upon a partner's death or withdrawal.
  3. Limited Liability Partnerships (LLP)An LLP blends the advantages of a partnership with the benefits of limited liability. Introduced under the LLP Act of 2008, it is ideal for professionals or small businesses looking for a flexible yet secure structure.
    Features:
    • Combines the flexibility of partnerships with limited liability protection.
    • A separate legal entity from its partners.
    • Requires at least two designated partners.
  4. Private Limited Companies (Pvt Ltd)A Private Limited Company is a favoured structure among startups and small-to-medium enterprises with several advantages. It is governed by the Companies Act of 2013 and allows for limited liability while offering scalability.
    Features:
    • Separate legal identity from its owners.
    • Limited liability for shareholders.
    • Eligibility to issue shares for raising funds.
  5. Public Limited CompaniesA Public Limited Company is suitable for businesses aiming to scale operations and raise public funds through shares. A company whose shares are publicly traded, with ownership open to the general public.
    Features:
    • Requires a minimum of seven shareholders and three directors.
    • No upper limit on the number of shareholders.
    • Vulnerable to market fluctuations.
  6. One Person Companies (OPC)Introduced under the Companies Act of 2013, an OPC caters to solo entrepreneurs seeking limited liability benefits. Simply put, a single individual owns the company while enjoying limited liability protection.
    Features:
    • Mandatory to appoint a nominee.
    • Limited liability for the owner.
    • Not eligible for equity funding.
  7. Section 8 Companies (NGOs)Section 8 Companies are nonprofit organisations formed under the Companies Act of 2013 to promote social welfare activities. These companies focus on charitable objectives like education, healthcare or environmental protection.
    Features:
    • Profits cannot be distributed as dividends.
    • Tax exemptions are available under specific conditions.
  8. Joint-Venture CompaniesA Joint- Venture (JV) combines two or more entities to collaborate on a specific project or goal. Partners share resources, expertise and profits while retaining their individual entities.
    Features:
    • Operates under a joint agreement for a specific purpose.
    • Temporary or long-term collaboration.
    • Shared financial risks.
  9. Non-Government Organisations (NGOs)NGOs are entities dedicated to social welfare causes, operating independently of the government. NGOs can be structured as trusts, societies or Section 8 Companies, focusing on various charitable activities.
    Features:
    • Operates without a profit motive.
    • May qualify for tax exemptions.
    • Drives social change and community development.

Types of Companies Based on Size

In India, companies can be categorized based on their size, typically determined by factors such as turnover, capital investment, and employee count. Here are the main types of companies in India based on size:

Here are the main types of companies based on members:

1. Micro Enterprises

Micro-enterprises are the smallest category of companies, characterized by low investment in plant and machinery or equipment. In India, micro-enterprises are defined as those with an investment of up to Rs. 1 crore in manufacturing and an annual turnover of Rs. 5 crore.

2. Small Enterprises

Small enterprises are slightly larger than micro-enterprises but still fall within the small-scale sector. In India, small enterprises are defined as those with an investment of not more than Rs. 10 crore and an annual turnover of not more than Rs. 50 crore.

3. Medium Enterprises

Medium enterprises are larger than small enterprises but smaller than large corporations. In India, medium enterprises are defined as those with an investment of more than Rs. 50 crore in manufacturing and an annual turnover of not more than Rs. 250 crore.

4. Large Enterprises

Large enterprises are the largest category of companies, characterized by substantial investment, high turnover, and a large workforce. In India, large enterprises have investments exceeding Rs. 50 crore in manufacturing or Rs. 250 crore in services. They often have hundreds or even thousands of employees and operate nationally or multinational.

These categories are defined by the Ministry of Micro, Small, and Medium Enterprises (MSME) in India to provide various benefits and incentives to small and medium-sized enterprises (SMEs), such as priority lending, subsidies, tax exemptions, and easier access to government schemes and programs.

Types of Companies Based on Liabilities

Companies can be categorized based on the extent of liability their members or owners have. Some major types of companies based on liabilities are-

1. Company Limited by Shares

A Company Limited by Shares is a type of company where the liability of its members is limited to the amount unpaid on their shares. This means that shareholders are not personally liable for the company's debts beyond the amount they have agreed to contribute towards the shares they hold.

Companies Limited by Shares can be further classified into private limited companies and public limited companies based on the number of shareholders and other criteria.

2. Company Limited by Guarantee

In a Company Limited by Guarantee, the liability of its members is limited to the amount they agree to contribute to the company's assets in the event of its winding up. This type of company is commonly used for non-profit organizations, clubs, societies, and associations.

3. Unlimited Liability Company

In an Unlimited Liability Company, the members or owners have unlimited personal liability for the company's debts and obligations. This means that their personal assets are at risk to satisfy the company's liabilities, and creditors can pursue the members' personal assets to settle debts owed by the company.

Types of Companies Based on Listing Status

Companies can also be classified based on their listing status, which refers to whether their shares are listed on a stock exchange for public trading.

1. Listed Companies

Listed companies are those whose shares are listed and traded on a recognized stock exchange, such as the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) in India.

These companies are subject to stringent regulatory requirements and disclosure norms mandated by the Securities and Exchange Board of India (SEBI). Listing provides liquidity to shareholders and enables the company to raise capital by issuing additional shares to the public.

2. Unlisted Companies

Unlisted companies are those whose shares are not traded on any stock exchange. These companies may be privately held, meaning that their shares are owned by a small group of shareholders or closely held by promoters and investors.

Unlisted companies are not subject to the same level of regulatory scrutiny as listed companies but may still be required to comply with certain statutory requirements under the Companies Act.

Types of Companies Based on Holding

Companies can be categorized based on their holding structure, which refers to the relationship between parent companies and their subsidiaries.

1. Parent Company

A parent company is a corporation that owns a controlling interest in one or more subsidiary companies. It typically holds more than 50% of the voting rights in the subsidiary companies and has the power to make decisions affecting their operations and strategic direction.

2. Subsidiary Company

A subsidiary company is a company that is controlled by another company, known as the parent company. Subsidiary companies can be wholly or partially owned by the parent company, depending on the percentage of shares held.

Subsidiary companies operate independently but are subject to the control and influence of the parent company.

3. Holdings Company

A holdings company is a company whose primary purpose is to hold investments in other companies rather than engage in operational activities. Holdings companies typically own shares in subsidiary companies and may provide their subsidiaries with strategic direction and financial support.

Unlike a parent company, a holding company does not engage in business operations of its own.

4. Affiliate Company

An affiliate company is a company that is related to another company through common ownership or control. Affiliate companies may be part of the same corporate group or have a strategic partnership with each other.

5. Associate Company

An associate company is one in which another company holds a significant but not controlling interest, usually between 20% to 50% of the voting rights. While the investing company has influence over the associate company's operations and management, it does not exercise full control.

Documents Required to Open Different Types of Business in India

Here’s a list of documents required to open a company in India:

  • Identity Proof: PAN card, Aadhaar card
  • Address Proof: Utility bill, rent agreement, or property papers
  • Business Registration Forms: Forms based on the business type (SPICe+, FiLLiP, etc.)
  • Digital Signature Certificate (DSC): For online submissions
  • Proof of registered office address: NOC or Rental Agreement

Additional documents may be required based on the business type, such as MOA and AOA for companies, LLP Agreements for LLPs or trust deeds for NGOs.

Conclusion

In India, the variety of business entities ensures there’s a fit for every kind of entrepreneur—whether you're a solo dreamer with a big vision, a small team building something impactful, or an organisation driven by social change.

Each type of entity offers unique features, advantages and challenges. From the simplicity of a sole proprietorship to the robust framework of private limited companies or the flexibility of LLPs, picking the right one can make your journey smoother, protect your personal assets and set you up for growth.

Think about your business goals:

  • Do you want to stay small and agile or scale into a large organisation?
  • Do you need investors or want to keep it self-funded?
  • Are compliance and taxes manageable?

Your answers to these questions will guide you toward the perfect fit. If you’re unsure where to start, don’t worry—many successful entrepreneurs were in the same place when they started. The key is to take it one step at a time.

Frequently Asked Questions

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What Type of Business Is More Profitable?

The profitability of a business depends on various factors, including the industry, business model and operational efficiency. For instance:

  • Technology startups have high profit potential due to scalability.
  • Service businesses, like consulting or digital marketing, often have low initial costs and high margins.
  • E-commerce can be highly profitable if inventory and logistics are managed efficiently.
  • Real estate and manufacturing tend to yield long-term gains but require significant capital.

Ultimately, the most profitable business aligns with the entrepreneur’s expertise and market demand.

Why Do Different Types of Businesses Exist?

Different types of businesses exist to cater to the diverse needs of entrepreneurs, industries and regulatory requirements.

  • Legal and financial considerations: Some businesses need limited liability, while others prioritise simplicity.
  • Operational scope: A sole proprietor might work well for small-scale operations, while large organisations need a corporate structure.
  • Growth potential: Some structures, like private limited companies, attract investors, while others, like partnerships, foster collaboration.

What Types of Businesses Are in Demand?

Currently, high-demand businesses include:

  • Technology and SaaS: Cloud computing, AI and software solutions.
  • E-commerce: Online retail continues to grow post-pandemic.
  • Health and wellness: Telemedicine, fitness and organic products are booming.
  • Sustainable businesses: Eco-friendly products and renewable energy.
  • Digital services: Marketing, content creation, and app development.

These industries reflect shifting consumer priorities and technological advancements.

What Are the Five Types of Business Organisations?

The five major types of business organisations are:

  • Sole Proprietorship: Owned and managed by one person; simple and cost-effective.
  • Partnership: Owned by two or more individuals sharing responsibilities and profits.
  • Limited Liability Partnership (LLP): A hybrid structure with limited liability and partnership benefits.
  • Private Limited: A separate legal entity that can raise capital by issuing shares.
  • Public Limited: Allows a company to offer shares to the general public, either on the stock market or privately.

What Is the Director Identification Number (DIN)?

The Director Identification Number (DIN) is a unique identification number assigned by the Ministry of Corporate Affairs (MCA) in India to individuals intending to serve as company directors. It is mandatory under the Companies Act of 2013.

Nipun Jain

Nipun Jain is a seasoned startup leader with 13+ years of experience across zero-to-one journeys, leading enterprise sales, partnerships, and strategy at high-growth startups. He currently heads Razorpay Rize, where he's building India's most loved startup enablement program and launched Rize Incorporation to simplify company registration for founders.

Previously, he founded Natty Niños and scaled it before exiting in 2021, then led enterprise growth at Pickrr Technologies, contributing to its $200M acquisition by Shiprocket. A builder at heart, Nipun loves numbers, stories and simplifying complex processes.

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Related Posts

Private Limited Company Tax Rate: Latest PVT LTD Tax Rate Explained

Private Limited Company Tax Rate: Latest PVT LTD Tax Rate Explained

Private limited companies in India are subject to various taxes, with the primary one being the corporate income tax. Understanding the tax rates and compliances is crucial for entrepreneurs and business owners to manage their finances effectively. In this article, we will delve into the intricacies of the private limited company tax rate, along with other key aspects of taxation for these entities.

Table of Contents

Budget 2024 Latest Update on Corporate Tax Rate

Finance Minister Nirmala Sitharaman has proposed a reduction in the corporate tax rate for foreign companies, bringing it down from 40% to 35% in the 2024 budget.

Subdivisions of Direct Taxes

Direct taxes in India are categorized as follows:

  1. Personal Income Tax
    • Paid by individual taxpayers based on their income.
    • Taxed according to predefined slabs at different rates.
  2. Corporate Income Tax (CIT)
    • Paid by domestic and foreign companies on their income earned in India.
    • The CIT is levied at rates specified by the Income Tax Act, subject to annual revisions in the Union Budget.

What is Pvt. Ltd. Tax Rate?

The Pvt. Ltd. tax rate refers to the corporate income tax rate applicable to private limited companies in India. Under the Income Tax Act, 1961, domestic companies are generally taxed at 30% on their total taxable income, with variations based on turnover and certain conditions.

For companies with a turnover of less than ₹400 crore, the tax rates are as follows:

  • Turnover up to ₹1 crore: Taxed at 25%.
  • Turnover between ₹1 crore and ₹10 crore: Taxed at 25% on profits exceeding ₹25 lakh, plus an additional ₹25 lakh.
  • Turnover above ₹10 crore: Taxed at 30%.

A 4% Health and Education Cess is levied on the total tax payable.

Companies may also opt for a reduced tax rate of 22% under Section 115BAA, provided they forgo certain exemptions and deductions. This option also includes the surcharge and 4% cess.

Additionally, new manufacturing companies incorporated after October 1, 2019, can avail a 15% tax rate (plus surcharge and cess) under Section 115BAB, subject to specific conditions.

Corporate Income Tax Rate for AY 2022-23

The Corporate Income Tax Rate for the Assessment Year 2022-23 varies based on the company's turnover and the applicability of surcharge and cess. Here's a table summarising the effective tax rates:

For Companies with Turnover Above ₹400 Crore

Income Slab Tax Rate
Up to ₹1 Crore 30%
Above ₹1 Crore but up to ₹10 Crore ₹3,00,000 + 30%
Above ₹10 Crore ₹3,00,00,000 + 30%

For Companies with Turnover Below ₹400 Crore

Net Income Slab (Gross Taxable Income – Deductions) Tax Rate Rebate u/s 87A (FY 2021-22)
Up to ₹1 Crore 25% Nil
Above ₹1 Crore but up to ₹10 Crore ₹25,00,000 + 25% Nil
Above ₹10 Crore ₹2,50,00,000 + 25% Nil

Key Budget 2022 Updates

1. No Changes in Tax Rates: The corporate tax structure remained unchanged.

2. Updated Surcharge Cap for Cooperatives: Surcharge capped at 7% for cooperatives with income between ₹1 crore and ₹10 crore.

3. Set-Off for Losses in Case of Start-ups: Extended incorporation date for start-ups to claim tax holiday under Section 80-IAC to 31 March 2023.

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Income Tax Rate for Domestic Manufacturing Companies for AY 2022-23

New manufacturing companies incorporated in India on or after October 1, 2019, and commencing production before March 31, 2023, can avail a concessional tax rate for private limited companies of 15% under Section 115BAB. However, this is subject to certain conditions, such as:

  • The company should be engaged in the business of manufacture or production of any article or thing
  • It should not be formed by splitting up or reconstruction of an existing business
  • It should not use any plant or machinery previously used in India (with certain exceptions)
  • The option to avail Section 115BAB must be exercised in the first year of operation

The applicable tax rates for domestic manufacturing companies for the assessment year 2022–23 are outlined below:

Category Conditions Tax Rate Surcharge Health and Education Cess
Certain Domestic Manufacturing Companies Opted for Section 115BA (effective from AY 2017-18) 25% Not Applicable Not Applicable
All Existing Domestic Companies Opted for Section 115BAA, regardless of incorporation date or activity type 22% 10% of taxable income if net income exceeds ₹1 crore 4% of Income Tax plus Surcharge
New Manufacturing Domestic Companies Opted for Section 115BAB 15% 10% of taxable income if net income exceeds ₹1 crore 4% of Income Tax plus Surcharge

Education Cess for Companies

Private limited companies are required to pay an education cess at the rate of 4% on the total income tax, including the applicable surcharge. Below is a detailed explanation of the corporate income tax rates for FY 2021–22 or AY 2022–23:

For companies with a turnover of up to ₹400 crore:

  • Income up to ₹1 crore is taxed at 25%.
  • Income exceeding ₹1 crore but up to ₹10 crore is taxed at 25% plus ₹25,00,000. A 7% surcharge applies.
  • Income above ₹10 crore is taxed at 25% plus ₹2,50,00,000, with a 12% surcharge.

For companies with a turnover exceeding ₹400 crore:

  • Income up to ₹1 crore is taxed at 30%.
  • Income exceeding ₹1 crore but up to ₹10 crore is taxed at 30% plus ₹3,00,000. A 7% surcharge applies.
  • Income above ₹10 crore is taxed at 30% plus ₹3,00,00,000, with a 12% surcharge.

The education cess of 4% is uniformly applicable to the total tax payable, including any surcharge, regardless of turnover.

Ready to incorporate your company? Start your journey with Private Limited Company Registration through Razorpay Rize today!

Income Tax Rate for Foreign Company

Foreign companies, i.e., those incorporated outside India but earning income from Indian sources, are taxed at a basic rate of 40% (plus applicable surcharge and cess). The surcharge is levied at 2% on income between ₹1 crore to ₹10 crores and 5% on income exceeding ₹10 crores.

It is important to note that foreign companies can avail beneficial provisions under the Double Taxation Avoidance Agreement (DTAA) between India and their country of residence to minimize their tax liability.

Minimum Alternate Tax for Company

The Minimum Alternate Tax (MAT) provisions apply to companies whose tax payable under the normal provisions of the Income Tax Act is less than 15% of their book profits. In such cases, MAT is levied at 15% (plus applicable surcharge and cess) of the book profits.

However, MAT is not applicable to companies opting for the concessional tax regimes under Section 115BAA and Section 115BAB. Further, the credit for MAT paid is allowed to be carried forward for 15 years to be set off against future tax liabilities.

H2 - How to Calculate Total Income for a Company?

To arrive at the taxable income for a private limited company, the following steps are involved:

Steps Particulars
Step 1 Compute the net profit as per the profit and loss account
Step 2 Add income tax paid or provided
Step 3 Add depreciation charged in the books of accounts
Step 4 Add disallowed expenditures or expenses
Step 5 Subtract depreciation allowable under the Income Tax Act
Step 6 Subtract income exempt under the Income Tax Act
Step 7 Subtract deductions allowable under Chapter VI-A
Step 8 The result is the total taxable income

The Corporate Income Tax Rate is then applied to this taxable income to determine the tax liability of the private limited company.

Returns Applicable for Domestic Company for AY 2022-23

Private limited companies are required to file their income tax returns annually. For the assessment year 2022-23, the following returns are applicable:

1. ITR-6: This return is applicable for companies other than those claiming exemption under Section 11 (income from property held for charitable or religious purposes).

2. ITR-7: This return is applicable for companies claiming exemption under Section 11.

The due date for filing the return is 31st October of the assessment year. However, for companies required to furnish a report in Form No. 3CEB under Section 92E (relating to international transactions), the due date is 30th November of the assessment year. Companies must also ensure timely compliance with advance tax payments, TDS/TCS obligations, and tax audit requirements (if applicable) to avoid penal consequences.

Domestic Company Tax Slab for AY 2024-25

For the Assessment Year (AY) 2024–25, the income tax rates for domestic companies depend on their turnover or gross receipts during the financial year (FY) 2020–21, as well as the tax provisions they choose to apply under specific sections of the Income Tax Act. The applicable rates are as follows:

  • If the total turnover or gross receipts during FY 2020–21 do not exceed ₹400 crores:
    • Tax rate: 25%
  • If the company opts for Section 115BA:
    • Tax rate: 25%
  • If the company opts for Section 115BAA:
    • Tax rate: 22%
  • If the company opts for Section 115BAB:
    • Tax rate: 15%
  • For any other domestic company:
    • Tax rate: 30%

These rates are exclusive of surcharge and cess, which will be applied additionally based on the applicable income slabs.

Frequently Asked Questions

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Register your Business at just 1,499 + Govt. Fee

Register your business
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Register your Private Limited Company in just 1,499 + Govt. Fee

Register your business
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Register your One Person Company in just 1,499 + Govt. Fee

Register your business
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Register your Business starting at just 1,499 + Govt. Fee

Register your business
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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

Register your business

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

How much tax does a private limited company pay?

The tax liability of a private limited company depends on various factors such as its residential status, income sources, turnover, etc. Domestic companies are taxed at a basic rate of 30% (with concessional rates of 25%, 22%, or 15% available subject to conditions) plus applicable surcharge and cess. Foreign companies are taxed at 40% (plus surcharge and cess) on their India-sourced income.

How can I avoid tax in a PVT Ltd company?

While tax planning is permissible, tax avoidance or evasion is illegal. Private limited companies can legitimately minimise their tax outgo by availing deductions, exemptions, and incentives provided under the Income Tax Act. For instance, companies can claim expenditures incurred wholly for business purposes, deductions for hiring new employees (Section 80JJAA), or for undertaking in-house R&D (Section 35(2AB)). Startups can avail a 100% tax holiday for three consecutive years out of their first ten years of operation.

What is 25% tax on a company?

Domestic companies with an annual turnover of up to ₹400 crores in the financial year 2021-22 are eligible for a concessional corporate tax rate of 25% (plus applicable surcharge and cess). This reduced rate aims to provide relief to smaller companies and promote their growth.

What are the tax benefits of Pvt Ltd?

Private limited companies can avail of several tax benefits under the Income Tax Act:

• Expenditure incurred wholly for business purposes is tax-deductible

• Deductions available for hiring new employees (Section 80JJAA), inter-corporate dividends (Section 80M), in-house R&D (Section 35(2AB)), etc.

• 100% profit-linked deductions for specified businesses like startups, affordable housing, agricultural extension, etc.

• Carry forward of business losses for eight years and unabsorbed depreciation indefinitely

• Deductions for CSR expenditure incurred on eligible activities

10 Advantages of Incorporating a Company: Why You Should Incorporate Your Business

10 Advantages of Incorporating a Company: Why You Should Incorporate Your Business

In today's competitive business landscape, entrepreneurs are constantly seeking ways to establish a strong foundation for their ventures. One crucial decision that can significantly impact the growth and success of a business is the choice to register as a company. Company registration offers a multitude of advantages that can propel your enterprise to new heights. In this article, we will delve into the top 10 benefits of registering a company, empowering you to make an informed decision for your business's future.

Table of Contents

What are the Benefits of Company Incorporation in India?

Registering a company in India comes with a host of advantages that can elevate your business to new levels of success. From enhanced credibility to legal protection and access to funding, company registration provides a solid foundation for growth. Let's explore these benefits in more detail.

1. Legal Entity

One of the primary benefits of business registration is that the company becomes a separate legal entity. Under the Companies Act, a registered company is considered an artificial person, distinct from its directors and shareholders. This means that upon incorporation, the company acquires its legal personality, allowing it to own property, incur debts, and engage in legal proceedings under its name.

The concept of a separate legal entity provides several advantages:

  • The company can enter into contracts and agreements independently
  • It can sue or be sued in its name
  • The company's assets and liabilities are separate from those of its owners
  • The company's existence is not tied to the lifespan of its members

This legal separation is crucial for protecting the personal assets of the company's owners, as they are not personally liable for the company's debts or legal obligations.

2. Perpetual Succession

Company registration ensures perpetual succession, which is a significant advantage for businesses. Perpetual succession means that the company's existence continues indefinitely, regardless of any changes in its membership, staff, or shareholders. This stability is a key benefit of incorporating a business, as it ensures that the company can outlast individual members or leadership changes.

Here are some key points about perpetual succession:

  • The company's existence is not affected by the death, retirement, or resignation of its members
  • Shares can be transferred without disrupting the company's operations
  • The company remains operational until it is legally dissolved
  • Perpetual succession allows for long-term planning and execution of business strategies

By incorporating your business, you create a stable and enduring entity that can withstand changes in ownership and management, providing a solid foundation for growth and success.

3. Limited Liability

Limited liability is one of the most significant benefits of registering a private limited company. In a registered company, the shareholder's assets are protected from the company's debts and legal obligations. This means that in the event of financial losses or legal issues, the shareholders are only liable to the extent of their investment in the company.

Key points about limited liability:

  • Shareholders' assets (e.g., houses, cars, bank accounts) are safeguarded
  • Directors are not personally liable for the company's debts or legal liabilities
  • Limited liability encourages entrepreneurship and risk-taking
  • It provides a layer of protection for business owners

In contrast, sole proprietors and partners in unregistered businesses are personally liable for all business debts and obligations, putting their assets at risk. Limited liability is a crucial advantage of company registration, offering peace of mind and financial security for business owners.

4. Free & Easy Transferability of Shares

One of the advantages of incorporation of a company is the free and easy transferability of shares. In a registered company, shares can be transferred from one shareholder to another without affecting the company's operations. This flexibility in ownership transfer is a significant benefit, particularly for growing businesses.

Here are some key aspects of share transferability:

  • Public companies: Shares are freely transferable, and shareholders can sell their shares to anyone without restrictions.
  • Private companies: While share transfer is possible, there may be some restrictions imposed by the company's bylaws or shareholder agreements.
  • The transfer process typically involves a signed share transfer form and the handover of the share certificate to the buyer.
  • Easy share transferability allows for smooth succession planning and exit opportunities for shareholders.

Free share transfer attracts investors, raises capital, and enables ownership changes without disrupting operations.

5. Owning Property

As a separate legal entity, a registered company can acquire, own, and transfer property in its name. This is a significant advantage of company registration, as it distinguishes the company's assets from those of its shareholders. Shareholders do not have direct ownership rights over the company's property; instead, their interest lies in the shares they hold.

Key points about company property ownership:

  • The company can purchase, lease, or sell property independently
  • Shareholders' personal assets are protected from claims against the company's property
  • The company's property remains an exclusive asset of the company, not its individual members
  • Owning property in the company's name can provide tax benefits and asset protection

By owning property as a separate legal entity, a registered company can secure its assets, attract investors, and create a stable foundation for long-term growth and success.

6. Can Sue or Be Sued

Another advantage of company registration is that a registered company can sue or be sued in its name. As a separate legal entity, the company has the right to initiate legal proceedings or defend itself against legal claims, just like an individual. This ability to engage in legal matters independently is a crucial aspect of a company's legal status.

Key points about a company's legal standing:

  • The company can file lawsuits to protect its interests, such as intellectual property rights or breach of contract
  • It can defend itself against legal claims without involving its shareholders or directors personally
  • The company's legal actions remain separate from the personal legal matters of its members
  • This legal independence helps maintain the company's professional reputation and protects its shareholders

The ability to sue or be sued in its name provides a registered company with the necessary legal tools to safeguard its interests, resolve disputes, and maintain its professional standing in the business world.

7. Dual Relationship

One of the unique advantages of incorporation of company is the ability to have a dual relationship with its members. In a registered company, an individual can simultaneously hold multiple roles, such as being a shareholder, creditor, director, and employee. This flexibility allows for a more complex and adaptable business structure.

Key points about dual relationships in a company:

  • A person can be a shareholder and an employee at the same time
  • Directors can also be shareholders, allowing for a more vested interest in the company's success
  • Shareholders can provide loans to the company, becoming creditors while maintaining their ownership stake
  • These dual roles are legally permissible and common in registered companies

A dual relationship with the company fosters ownership, commitment, and multi-role contributions to its success.

8. Borrowing Capacity

Company registration significantly enhances a business's borrowing capacity. Registered companies have access to a wider range of financing options compared to sole proprietorships or partnerships. This increased borrowing capacity is a crucial advantage for businesses looking to expand, invest in new projects, or maintain financial stability.

Key points about a company's borrowing capacity:

  • Companies can issue debentures to raise capital from the public
  • Registered companies are seen as more credible and stable by banks and financial institutions
  • Larger financial assistance is available to companies, making borrowing more accessible
  • Companies can secure loans by offering their assets as collateral

Company registration boosts borrowing capacity, enabling growth, expansion, and operational stability for a competitive edge.

9. Equity Raising

Another significant advantage of company registration is the ability to raise equity funding. Registered companies, particularly private limited companies, have access to a broader pool of investors and can attract equity investments from various sources. This equity raising potential is crucial for businesses looking to expand, scale operations, and increase their market presence.

Key points about equity raising in a registered company:

  • Private limited companies can attract investments from angel investors and private equity firms
  • Equity funding provides growth capital without the burden of debt repayment
  • Public limited companies can raise funds through initial public offerings (IPOs) and list their shares on stock exchanges
  • Equity investments often come with strategic partnerships and valuable industry connections

The ability to raise equity funding through company registration opens up new avenues for business growth, allowing companies to tap into the expertise and resources of investors while maintaining control over their operations.

10. Brand Building

Company registration plays a vital role in brand building and establishing a strong business identity. By registering your company, you create a distinct and recognizable brand that sets you apart from competitors. A registered company name provides legal protection and prevents others from using a similar name, safeguarding your brand's uniqueness.

Key points about brand building through company registration:

  • A registered company name adds credibility and professionalism to your brand
  • It helps build trust among customers, suppliers, and partners
  • Legal protection for your brand name reduces the risk of confusion and infringement
  • A strong brand identity attracts customers, investors, and top talent

Registering a company builds a strong, lasting brand and sets the foundation for long-term success.

What Does Online Company Registration Entail?

The Companies Act of 2013 has made the process of company registration more streamlined and accessible through online means. The process involves several steps, including:

Key points about brand building through company registration:

  1. Selecting the type of company (Private Limited, Limited Liability Partnership, etc.)
  2. Applying for a Director Identification Number (DIN)
  3. Obtaining Digital Signature Certificates (DSC)
  4. Filing the necessary forms with the Ministry of Corporate Affairs (MCA)

It is crucial to verify the availability of the desired company name and ensure compliance with legal requirements throughout the registration process.

Types of Companies You Can Register

The Companies Act of 2013 provides for various types of companies that can be registered, each with its own characteristics and requirements. Some of the common types include:

  1. Private Limited Company: A company with a minimum of two and a maximum of 200 shareholders, with restrictions on the transfer of shares.
  2. Public Limited Company: A company that can have an unlimited number of shareholders and can offer shares to the public.
  3. One Person Company (OPC): A company with a single shareholder and director, suitable for solo entrepreneurs.
  4. Limited Liability Partnership (LLP): A partnership structure that provides limited liability to its partners.
  5. Section 8 Company: A non-profit company formed for charitable or social purposes.

Choosing the right type of company depends on factors such as business size, goals, and structure.

Conclusion

Registering a company is a strategic decision that offers numerous advantages for businesses. From limited liability protection to enhanced credibility and access to funding, company registration provides a solid foundation for growth and success. By understanding the benefits of company registration, entrepreneurs can make informed decisions and position their ventures for long-term prosperity.

Frequently Asked Questions

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What benefits does online registration offer compared to offline registration of a company

  • Online registration streamlines the process, making it faster and more convenient.
  • It eliminates the need for physical submission of documents, saving time and effort.
  • Online registration allows for real-time tracking of the application status.

How does online company registration simplify the process and help save time?

  • Online registration enables entrepreneurs to complete the process from anywhere, at any time.
  • Digital submission of documents eliminates the need for physical visits to government offices.
  • The online system guides users through the process, minimizing errors and delays.

Can there be cost benefits to registering a company online?

  • Online registration often comes with reduced fees compared to offline methods.
  • It eliminates the need for intermediaries or agents, saving on additional costs.
  • Digital submissions reduce paperwork and associated expenses.

What assistance and resources can be found when registering a company online?

  • Online portals often provide step-by-step guides and tutorials for the registration process.
  • FAQs and help sections address common queries and concerns.
  • Customer support is usually available through email, chat, or telephone for assistance.

How safe is the online company registration process?

  • Online registration portals, such as the MCA portal, employ secure encryption and data protection measures to ensure the safety of sensitive information.
  • The use of Digital Signature Certificates (DSC) adds an extra layer of security and authentication to the process.
  • Reputable online service providers adhere to strict data privacy and security standards to safeguard client information.

Swagatika Mohapatra

Swagatika Mohapatra is a storyteller & content strategist. She currently leads content and community at Razorpay Rize, a founder-first initiative that supports early-stage & growth-stage startups in India across tech, D2C, and global export categories.

Over the last 4+ years, she’s built a stronghold in content strategy, UX writing, and startup storytelling. At Rize, she’s the mind behind everything from founder playbooks and company registration explainers to deep-dive blogs on brand-building, metrics, and product-market fit.

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How to Convert a Proprietorship into a Private Limited Company in India

How to Convert a Proprietorship into a Private Limited Company in India

Starting as a sole proprietorship is common among freelancers, consultants, and early-stage entrepreneurs. It’s simple, cost-effective, and easy to manage. But as a business grows, so do the legal, financial, and operational complexities — and that’s when many founders consider converting their proprietorship into a Private Limited Company (Pvt Ltd).

In this blog, we break down everything you need to know about this transition — from legal formalities and document requirements to step-by-step procedures and benefits like limited liability and better access to funding.

Table of Contents

What is Proprietorship?

A sole proprietorship is the simplest form of business where a single individual owns, operates, and manages the business. It isn’t a separate legal entity, meaning the owner and the business are legally identical.

Key Characteristics:

  • Full ownership and control: The proprietor has complete control over decisions.
  • Unlimited liability: The owner is personally liable for all business debts and losses.
  • No formal registration: In many cases, registration is optional, though GST or local licenses may be required.
  • Limited access to capital: Raising funds from investors or banks is difficult due to a lack of legal status.
  • Common use cases: Freelancers, small shop owners, consultants, and home-based businesses.

What is a Private Limited Company?

A Private Limited Company is a legally registered business entity under the Companies Act, 2013. It offers a distinct legal identity and limits the liability of shareholders to the amount invested in the company.

Key Features:

Following are the key features of a private limited company:

  • Separate legal entity from its owners
  • Limited liability for all shareholders
  • Minimum 2 and maximum 200 shareholders
  • Perpetual succession – continues to exist regardless of changes in ownership
  • Preferred for scaling due to ease of raising funds, better governance, and investor confidence

Ready to convert your business? Get expert assistance with company registration and start your private limited journey today.

Difference Between Proprietor and Private Limited Company

Form Purpose Applicable To Due Date
MSME-1 Reporting outstanding payments to MSMEs > 45 days All specified companies 30.04.2025 (Oct–Mar) 31.10.2025 (Apr–Sep)
NDH-3 Half-yearly return filing for Nidhi companies Nidhi companies 30.04.2025 (Oct–Mar) 30.10.2025 (Apr–Sep)
Form-11 (LLP) Annual return of LLP with business and partner details All registered LLPs 30.05.2025
FC-4 Annual return of foreign company Foreign companies 30.05.2025
NDH-1 Return of statutory compliances Nidhi companies (as applicable) 29.06.2025
DPT-3 Reporting deposits and loans Every company 30.06.2025
PAS-6 Share Capital Audit Report Reconciliation Unlisted public companies 30.05.2025 (Mar) 29.11.2025 (Sep)
FLA Annual return to RBI for FDI/ODI holders Companies with FDI/ODI 15.07.2025
DIR-3 KYC KYC of Directors/DPs All DIN/DPIN holders as on 31.03.2025 30.09.2025
FC-3 Filing annual accounts of foreign company Foreign companies’ branches, liaison, and project offices 31.12.2025
CRA-2 Appointment of Cost Auditor Companies requiring cost audit 30 days from BM or 180 days from 01.04.2025, whichever is earlier
ADT-1 Appointment of Auditor Every company 14.10.2025 (15 days post AGM) 11.10.2025 (OPC)
AOC-4 / XBRL / CFS Filing of annual financial statements Specified companies 29.10.2025 (30 days from AGM) 27.09.2025 (OPC)
MGT-14 Filing resolutions on board report and accounts adoption Limited companies 30 days from board meeting
Demat for Pvt Cos Mandatory demat compliance under amended rules Private companies (excluding small/govt. companies) 30.06.2025
Form-8 (LLP) LLP’s Statement of Account & Solvency Every LLP 30.10.2025
MGT-7 / MGT-7A Annual return with company details MGT-7: All companies MGT-7A: Small Co. / OPC 28.11.2025
CRA-4 Filing of Cost Audit Report Companies under cost audit 30 days from receipt of cost audit report
CSR-2 Reporting on Corporate Social Responsibility contribution Companies required to comply with CSR provisions Due date generally aligns with AOC-4 filing

Law Governing the Conversion of Proprietorship into a Private Limited Company

The conversion is governed under:

  • Companies Act, 2013 – Covers the registration and compliance of private limited companies.
    Income Tax Act, 1961 – Specifically Section 47(xiv), which allows tax-neutral transfer of assets from proprietorship to company, subject to conditions.

Key Legal Points:

  • All assets and liabilities must be transferred to the company.
  • The sole proprietor must hold at least 50% of the company’s shares for 5 years.
  • The business must continue for a minimum of 5 years post-conversion.
  • No benefit should accrue to the proprietor other than share allotment.

Benefits of Conversion from Proprietorship to Private Limited Company

Converting to a private limited company offers multiple strategic advantages:

  • Limited Liability: Personal assets of owners are protected from business debts.
  • Increased Credibility: Appears more professional to clients, vendors, and investors.
  • Access to Funding: Equity funding becomes possible through share issuance.
  • Separate Legal Identity: Contracts and property can be in the company’s name.
  • Tax Benefits: Eligible for lower corporate tax rates and more deductions.
  • Ownership Transfer: Shares can be transferred, making exit or succession easier.
  • Improved Governance: Structured decision-making via the Board of Directors.

Requirements for Conversion

Here are the key requirements to convert a proprietorship into a private limited company:

  • Legal Agreement: A takeover agreement must be executed to transfer the business.
  • Memorandum of Association (MoA): Must include a clause to take over the existing business.
  • Minimum Capital: While there is no fixed capital requirement, at least ₹1 lakh is commonly shown.
  • Shareholding: The proprietor should hold at least 50% shares and voting rights post-conversion.
  • Minimum Directors: At least 2 directors (including the proprietor).
  • Asset Transfer: All tangible and intangible business assets must be transferred.

Related Read: Difference between MOA and AOA

Prerequisites for Forming a Private Limited Company

Before converting, the following conditions must be fulfilled to form a Private Limited Company:

  • Minimum 2 Directors: At least one must be a resident of India.
  • Minimum 2 Shareholders: Can be the same as directors.
  • DIN (Director Identification Number) for all directors.
  • DSC (Digital Signature Certificate) for signing incorporation documents.
  • Unique Name Approval through MCA's RUN or SPICe+ process.
  • Registered Office Address: Proof of ownership or rent agreement with utility bill.

Conditions for Converting to a Sole Proprietorship

To legally convert a sole proprietorship into a private limited company, the following conditions must be satisfied:

  1. Asset Transfer: All business assets must be transferred to the company without any monetary consideration except shares.
  2. Shareholding Requirement: The Proprietor must own ≥50% of the total share capital.
  3. No Other Benefits: No additional consideration, like cash or debt relief, is allowed.
  4. Continuity of Business: The business must continue post-conversion for at least 5 years.
  5. Valuation of Assets: Must be done by a Chartered Accountant to determine fair value.
  6. Documentation: Legal agreement (slump sale or asset transfer) must be executed.

Related Read: Difference Between Sole Proprietorship and One Person Company

Documents Required for Conversion to Private Limited Company

Here’s a checklist of documents you’ll need:

For Proprietor (Now Director/Shareholder):

For Business:

  • Ownership/Rental proof of business premises
  • Utility bill (not older than 2 months)
  • NOC from the landlord if rented
  • Statement of assets and liabilities (certified by a CA)

Procedure for Conversion of Proprietorship to Company

Follow these steps to convert your sole proprietorship into a private limited company:

Step 1: Name Reservation

Apply for the company name through RUN or SPICe+ Part A on the MCA portal.

Step 2: Get DSC

Obtain a Digital Signature Certificate (DSC) for all proposed directors.

Step 3: Draft MOA & AOA

  • Include a clause in the Memorandum of Association (MoA) to take over the existing business.
  • Prepare Articles of Association (AOA) for internal governance.

Step 4: File Incorporation via SPICe+

Submit SPICe+ forms (Part A and B) along with:

  • PAN & TAN application
  • MOA, AOA, declarations, affidavits, and other attachments.

Step 5: Execute Takeover Agreement

After the company's incorporation, a business takeover agreement must be signed between the proprietor and the company.

Step 6: Asset Transfer

Transfer all business assets and liabilities to the newly formed company.

Step 7: Post-Incorporation Tasks

  • Open a company bank account
  • Apply for GST, Shops & Establishment licenses (if required)
  • File commencement of business (INC-20A) within 180 days

Frequently Asked Questions (FAQs)

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Register your Business at just 1,499 + Govt. Fee

Register your business
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Register your Private Limited Company in just 1,499 + Govt. Fee

Register your business
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Register your One Person Company in just 1,499 + Govt. Fee

Register your business
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Register your Business starting at just 1,499 + Govt. Fee

Register your business
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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

Register your business

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

Can a proprietorship be converted to a Private Limited Company?

Yes, a proprietorship can be converted into a Private Limited Company under the Companies Act, 2013. This is typically done through a business transfer agreement (like a slump sale), followed by incorporation of a new company that takes over the assets and liabilities of the proprietorship.

Which is better: Proprietorship or Private Limited Company?

It depends on your business goals:

Form Purpose Applicable To Due Date
MSME-1 Reporting outstanding payments to MSMEs > 45 days All specified companies 30.04.2025 (Oct–Mar) 31.10.2025 (Apr–Sep)
NDH-3 Half-yearly return filing for Nidhi companies Nidhi companies 30.04.2025 (Oct–Mar) 30.10.2025 (Apr–Sep)
Form-11 (LLP) Annual return of LLP with business and partner details All registered LLPs 30.05.2025
FC-4 Annual return of foreign company Foreign companies 30.05.2025
NDH-1 Return of statutory compliances Nidhi companies (as applicable) 29.06.2025
DPT-3 Reporting deposits and loans Every company 30.06.2025
PAS-6 Share Capital Audit Report Reconciliation Unlisted public companies 30.05.2025 (Mar) 29.11.2025 (Sep)
FLA Annual return to RBI for FDI/ODI holders Companies with FDI/ODI 15.07.2025
DIR-3 KYC KYC of Directors/DPs All DIN/DPIN holders as on 31.03.2025 30.09.2025
FC-3 Filing annual accounts of foreign company Foreign companies’ branches, liaison, and project offices 31.12.2025
CRA-2 Appointment of Cost Auditor Companies requiring cost audit 30 days from BM or 180 days from 01.04.2025, whichever is earlier
ADT-1 Appointment of Auditor Every company 14.10.2025 (15 days post AGM) 11.10.2025 (OPC)
AOC-4 / XBRL / CFS Filing of annual financial statements Specified companies 29.10.2025 (30 days from AGM) 27.09.2025 (OPC)
MGT-14 Filing resolutions on board report and accounts adoption Limited companies 30 days from board meeting
Demat for Pvt Cos Mandatory demat compliance under amended rules Private companies (excluding small/govt. companies) 30.06.2025
Form-8 (LLP) LLP’s Statement of Account & Solvency Every LLP 30.10.2025
MGT-7 / MGT-7A Annual return with company details MGT-7: All companies MGT-7A: Small Co. / OPC 28.11.2025
CRA-4 Filing of Cost Audit Report Companies under cost audit 30 days from receipt of cost audit report
CSR-2 Reporting on Corporate Social Responsibility contribution Companies required to comply with CSR provisions Due date generally aligns with AOC-4 filing

- Choose proprietorship if you're running a small, low-risk business (e.g., freelancing, small shop).

- Choose a Private Limited Company if you want to scale, raise funds, or limit personal risk.

What is the tax rate for a Private Limited Company?

As of FY 2024–25 (subject to updates in the Union Budget), Iincome tax rate for Private Limited Companies (Turnover < ₹400 crore): 25% (excluding cess & surcharge).

Any other domestic company is taxed at 30%.

What is the biggest disadvantage of a sole proprietorship?

The biggest disadvantage is unlimited personal liability.
If the business incurs debt or faces a lawsuit, the proprietor’s personal assets (like home, savings, car) can be used to pay off liabilities.

Other major drawbacks:

  • Difficult to raise external funding
  • Lack of business continuity (ends with the owner’s death)
  • Limited scalability and professional image

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Basanth Verma
shopeg.in
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India.
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Dhaval Trivedi
Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
Nayan Mishra
https://zillout.com/
Smooth onboarding, seamless incorporation and a wonderful community. Thanks to the #razorpayrize team! #rizeincorporation
Dhaval Trivedi
Basanth Verma
shopeg.in
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India.
@foxsellapp
#razorpayrize #rizeincorporation
Dhaval Trivedi
Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
Nayan Mishra
https://zillout.com/