Private Ltd vs Sole Proprietorship

Private Ltd company registered under Companies Act 2013, has Limited Liability clause, Ease in getting Funds, Growth prospects through branch offices, which makes it more worthy than a Sole Proprietorship

Sole Proprietorship is not that reliable form of business, Due to lack of Limited Liability clause. Proprietor always hassle to take risk as the creditors has right to recover their money from his property

Private Limited is a concrete form of business which gives the confidence to the directors of the company to take risk, as Companies Act 2013 contains a Limited Liability clause. A Private Limited Company has legal protection for their name all around the Globe.


Private Limited Company

Sole Proprietorship

Compliance Clause

Private Limited Company needs to follow legal obligation which are required by MCA & ROC. Compulsory Auditing, ROC filings, General Meetings, etc Sole Proprietorship needs to file a tax return of those laws in which they are registered.This is the only Mandatory Compliance

Tax Clause

Private Limited Company has to pay flat 30% on the Net Total Income. Sole Proprietorship avails the income slabs rates which are applicable in the case of an Individual.

Growth Factor

Private Limited Company can grow faster due to the facts:
  • Open branch office without taking any separate Registration
  • Ease in raising Funds
  • Limited Libility Clause
Sole Proprietorships grow at slow pace:
  • To open a Branch Office, separate registration is required
  • Difficulty in raising Funds
  • No Limited Liability Clause

Name Clause

Once the Name is Registered cannot be taken by anyone No such immunity as Private Limited Company


People can invest their money and become the shareholder(owner) of the company Everybody prefers to invest their money and become the owners rather than lend it to somebody

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