Every founder we meet has been told three contradictory things by three different chartered accountants about which legal structure to choose. The five questions below cut through the noise. Answer them honestly and the right answer is usually obvious — without a single CA appointment.
Question 1 — Are you the sole owner, or are partners involved? If you're truly solo and likely to stay solo, Proprietorship is the fastest legal start: minimal compliance, your PAN doubles as the business PAN, and registration takes a single day. The moment a second person needs an ownership stake or a defined profit-share, Proprietorship stops working.
Question 2 — Do you need limited liability? If your business will hold inventory, sign large client contracts, employ multiple people, or operate in a sector where a single lawsuit can sink the company, you need a structure where personal assets are protected. LLP and Pvt Ltd both offer this. Proprietorship does not.
Question 3 — Will you raise outside investment? If the answer is even maybe-someday — venture capital, angel investment, structured debt — Pvt Ltd is the right call. LLPs cannot issue equity shares, which means VCs simply won't fund them. Almost every Indian startup that has ever taken angel money is structured as a Pvt Ltd.
Question 4 — What is your annual revenue likely to be? Once you cross ₹20 lakh in annual turnover (₹10 lakh for special-category states), GST registration becomes mandatory. Inter-state sales require it from rupee one. GST is *not* a structure — it sits on top of whichever entity you choose. Many proprietorships register for GST voluntarily before the threshold because GST input credit on purchases starts paying off quickly.
Question 5 — How much annual compliance load can you handle? Proprietorship has the lightest annual compliance — basically just income tax. LLP adds Form-11 and Form-8 each year. Pvt Ltd adds DIR-3 KYC, AOC-4, MGT-7, board meeting minutes, statutory audit (after ₹40L turnover), and ROC filings — significantly more paperwork, which is why most Pvt Ltd founders engage a CS or service provider.
The Prismatic Global Legacy Launchpad service handles all six common registrations — Proprietorship, LLP, Pvt Ltd, GST, Trademark, and MSME — and stays on as your year-round compliance partner. The first conversation is a free 20-minute consultation where we walk through these five questions, recommend a structure, and quote a flat fee for the work. No CA, no agent, no hidden retainers.
