Pvt Limited vs LLP vs OPC — which entity should I start with?
A practical answer for founders incorporating or running a startup in India.
Use this as a default map, not legal advice:
- Sole prop / Partnership — testing a service, no outside capital, you want minimum cost.
- LLP — two or more partners, professional firm, limited liability, no plan to issue ESOPs or raise VC.
- OPC — one founder, want a company and limited liability, no co-founder or investor yet.
- Pvt Limited — you will hire, offer ESOPs, raise angels/VCs, or build a product company.
A Pvt Ltd needs at least two directors and can start with two shareholders (they can be the same people). Compliance is heavier (board meetings, auditor, ROC). That cost is usually worth it if a priced round is even a 12-month possibility.
You can convert later. Conversion takes months and professional fees — cheaper than rebuilding a cap table after a messy LLP raise.
This is educational information, not legal, tax, or FEMA advice. Confirm the current MCA, GST, and RBI position with a professional before you file.