Proprietorship
Simple and cheap to start, with few filings. The owner and the business are the same in law, so the owner is personally liable for the debts. It is hard to bring in investors.
Partnership and LLP
A partnership is flexible, but partners carry unlimited liability. A limited liability partnership gives partners limited liability with lighter compliance than a company. LLPs are common for professional firms and family businesses.
Private limited company
A separate legal entity with limited liability, the most familiar structure for investors and for startups that plan to raise funds or issue shares. It has the heaviest compliance, with annual accounts, returns and audit.
How to decide
- Do you plan to raise outside money? A private limited company is usually preferred.
- How much compliance can you handle? A proprietorship or LLP is lighter.
- How important is limited liability to you?
- Who are your customers? Larger buyers often prefer dealing with companies.
- What are the tax effects for your income level? Confirm with an adviser.
Quick answers
Can I change the structure later?
Yes, a proprietorship or LLP can be converted into a company, though it takes work and some costs. Choosing well at the start saves effort.
What is a one person company?
A company with a single owner and limited liability. It suits solo founders who want a company structure.
This article is general information, not advice for your situation. Rules, limits and due dates change, so we confirm the current position before you act on it.