03 — Business setup
Business setup — proprietorship to Pvt Ltd
The structure chosen for a reason, then incorporated properly — with the PAN, TAN, bank account and first-year calendar that follow it.
The structure question is usually answered badly, and the cost of answering it badly is paid every year afterwards in compliance you did not need.
- Proprietorship — no separate legal entity, taxed in your own slab, almost no annual filings. The right answer for most single-person businesses that are not raising money.
- Partnership — a deed, a PAN, and partners taxed on their share. Simple, but unlimited liability.
- LLP — limited liability with far lighter annual compliance than a company. A good middle for professional firms and two-or-three-founder businesses.
- Private Limited — the only structure that takes outside equity cleanly, with ESOPs, a board and the full annual compliance load that comes with it. Worth it when you are raising, expensive when you are not.
We take you through the incorporation itself — name approval, DSC and DIN, the MCA filing, the MOA and AOA or the LLP agreement — and then the things people forget: PAN and TAN, the current account, the GST registration if the numbers call for one, and a written first-year compliance calendar so nothing lapses in month eleven.
Start with a call about this
Thirty minutes, a fixed quote in writing the same day, and the fee adjusted against the work if you go ahead within fourteen days.
Questions
About business setup — proprietorship to pvt ltd
The things people ask us before they start.
Proprietorship or Pvt Ltd?
If you are not raising outside money and not carrying real liability risk, a proprietorship is almost always the right start — the annual compliance of a company costs more than most first-year businesses earn. Converting later is routine.
Can a Pvt Ltd be registered at my home address?
Yes, with an NOC from the owner and a utility bill in support. The registered office can be changed later; it does not have to be commercial premises to begin with.
What does a Pvt Ltd cost to keep alive each year?
Board meetings and minutes, the annual return and financial statements to the MCA, director KYC, and a statutory audit regardless of turnover. Budget for it before you choose the structure, not after.