Proprietorship,Partnership & Private Limited Company Comparison

Proprietorship Partnership/LLP Private Limited Company
Formation & Registration Easy Moderate High formalities
Liability Unlimited Unlimited – Regular Partnership firm

Limited – LLPs

Salary to Proprietor/Partner/Director Not Allowed Allowed Subject to restrictions Allowed. No restrictions
Interest on Capital Not Allowed Allowed – Max @ 12% Allowed with out restriction
Perpectual Succession No No Yes
Documentation Very Very Less Less
Tax Rate 30% 30% 30%
Max. no of Partners 1 12 50
Audit Requirement NA (If turnover is less than 40 Lakhs) For firms – NA(If turnover is less than 40 Lakhs)

For LLP- Compulsory

Basic Income exemption limit 160000 Nil Nil