Sole proprietorship is a “One Man Business Entity”. choose this option if you want to own the business under own your legal name and under your own PAN number without getting into too many legal formalities involved in other constitutions. This will be the fastest and cheapest form of business to start with.
A Partnership firm is a Legal identity which is registered by two or more persons by executing a partnership deed with each other. Choose this option if you are two or more person (Max limit up to 10 Partners) coming together for a business idea. Even though this form of business is governed under the Indian Partnership Act 1932, the partners are at free will to decide on various terms pertaining to share of profits/salaries and other related matters. It has less legal regulatory as compare to PVT Ltd Company or Limited liability partnership.
Private Limited Companies are regulated under the company's Act 2013 and the Companies Incorporation Rules, 2014. It is a prevalent and popular business option in India as it gives separate legal identity, Limited liability, more transparency, and international recognition to the business. The ownership of the company is divided among various shareholders (Max upto 200) as per there capital investment into the business as share capital.
The public limited company is also governed under the company's Act 2013 and the Companies Incorporation Rules, 2014. A Minimum of 7 shares holders and 3 directors are required to start a public limited company. It is more suitable for generating funds from the public at large by issuing IPO's and getting listed at the stock Market. Public limited company follow strict regulatory guidelines from SEBI and under Companies Act 2013 as public money is involved in the company.
LLP is a body corporate formed and incorporated under LLP Act, 2008. It is a legal and separate entity from that of its partners. It is preferred as it incorporates the benefits of both partnership firm and company into a single form of organization. The concept of the Limited Liability Partnership (LLP) was introduced in India in 2008. The Limited liability Partnership Act, 2008 regulates the LLP in India. Minimum two partners are required to incorporate an LLP and there is no upper limit on the maximum number of partners. The rights and duties of designated partners are governed by the LLP agreement