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If you are a single person who owns the entire initial investment required for the business, a One Person Company would be ideal for you. On the other hand, if your business has two or more owners and is actively seeking investment from other parties a Limited Liability Partnership (LLP) or Private Limited Company would suit you best.
The answer to that question is – Yes if you want to spend less initially, it would be wise to go in for a Sole Proprietor, or a Partnership. But, if you are sure that you will be able to recover the setup and compliance costs, you can opt for a One Person Company, LLP or a Private Limited Company
The liability of business structures like sole proprietorships, HUFs, and partnerships is unlimited. In the event of any default on loans, the entire money will be recovered from the members or partners in profit sharing ratio. In these cases, assets are at risk. A limited liability clause is present in a company and a LLP. Members are only liable for the amount they contribute or the value of the shares they own.
A sole proprietorship is taxed at the normal slab rates. The income from a sole proprietorship is added to the individual's other income. Partnerships and companies, however, are taxed at 30%.
RMZ Millenia Business Park Phase 2,
Campus 4B, 6th Floor, Unit 602A,
Perungudi, Chennai – 600096
TN, INDIA