Business Structures

The structure you choose decides who is liable for the business's debts, how it is taxed, how much compliance it carries and how easily it can grow or raise money. Choose a structure to read about it in detail.

At a glance

	Company	LLP	Partnership Firm	Proprietorship	Trust / Society
Law	Companies Act, 2013	Limited Liability Partnership Act, 2008	Indian Partnership Act, 1932	No separate law; the business is the owner's own activity	Trust: Indian Trusts Act, 1882 and the State's public trust law. Society: Societies Registration Act, 1860 or the State Act (in Haryana, the Haryana Registration and Regulation of Societies Act, 2012)
Registered with	Registrar of Companies (Ministry of Corporate Affairs)	Registrar of Companies (Ministry of Corporate Affairs)	Registrar of Firms of the State (registration is optional but strongly advised)	No incorporation; identified through registrations such as GST, Udyam and shop and establishment licence	Trust deed with the Sub-Registrar; society with the State Registrar of Societies
Members	Private company: 2 to 200 members and at least 2 directors. One Person Company: 1 member and 1 director	At least 2 partners, including 2 designated partners (one resident in India); no upper limit	2 to 50 partners	1 (the proprietor)	Trust: at least 2 trustees. Society: at least 7 members
Liability	Limited to the unpaid amount on the shares held	Limited to each partner's agreed contribution	Unlimited, joint and several: each partner can be held liable for all the firm's debts	Unlimited: the owner is personally liable for all business debts	Trustees and governing members act for the institution; they are personally answerable for breach of trust
Income tax	22% under the concessional regime (otherwise 25% or 30%), plus surcharge and cess. Dividends are taxed again in the shareholders' hands	30% plus surcharge and cess; the partners' share of profit is not taxed again	30% plus surcharge and cess; interest and remuneration to partners are deductible within limits; partners' profit share is exempt	Taxed with the owner's other income at individual slab rates; presumptive schemes are available to small businesses within limits	Income can be exempt once the institution is registered with the Income Tax Department and applies its income to its objects

General information on the law as it stands for Tax Year 2026-27. Rates, limits and procedures change; please confirm before acting.