Before you start planning for the business form

Assess your Strengths,weakness,opportunities and threats(SWOT Analysis)
Determine Start Up Funds
Determine the time commitment
consult others in your field
Be Aware of your Risk Profile
Identify your Competitors
Follow your Passion

Particulars	Sole Proprietorship	Partnership	Limited Liability Partnership	One Person Company	Private Limited Company	Public Limited company
Acts Involved	No Specified Act	Indian Partnership	Limited Liability Partnership Act, 2008	Companies Act, 2013	Companies Act, 2013	Companies Act, 2013
Separate Legal Entity	No	No	Yes	Yes	Yes	Yes
Registration Requirement	No	Mandatory	Mandatory	Mandatory	Mandatory	Mandatory
Number of Members	1	2-20	2-Unlimited	1	2-200	7-Unlimited
Liability Protection	Unlimited	Unlimited	Limited	Limited	Limited	Limited
Number of Directors	1-1	2-20	2-15	2-15	1-15	3-15 (Which can be extended further)
Statutory Audit	Not Compulsory	Not Compulsory	Depends	Compulsory	Compulsory	Compulsory
Foreign Direct Investment	No	No	Yes, but needs govt. approval	No	Yes, but govt. approval needed in some cases	Yes, but not allowed in Gambling, Betting Chit funds and sectors not opened for Pvt. Ltd. govt. approval
Annual Filings	Filed with the ROC	Filed with the ROC	Filed with the ROC	Income Tax Returns with the ROC	Income Tax Returns with the ROC	Income Tax Returns with the ROC
Ownership Transferability	No	No	Yes	Yes	Yes	Yes
Rate of Tax	Low	High	High	Moderate	Moderate	Moderate
	0-34.61% (Includes Surcharge & Eductaion cess)	29.87-34.61% (Includes Surcharge & Eductaion cess)	29.87-34.61% (Includes Surcharge & Eductaion cess)	29.87-34.61% (Includes Surcharge & Eductaion cess)	29.87-34.61% (Includes Surcharge & Eductaion cess)	29.87-34.61% (Includes Surcharge & Eductaion cess)
Name Approval with MCA	No	No	Yes	Yes	Yes	Yes
Borrowing	Personal Sources and Banks	-	Banks & personal Sources	Banks & personal Sources	-	-
Owners Remuneration	Owner's Salary not allowed	Allowed as per Agreement	Partner's remuneration allowed. Certain restrictions	Partner's remuneration allowed Certain restrictions	Allowed as per Agreement (Can't exceed 11% of Profits)	Allowed as per agreement
Board Meetings	No need	Not Allowed	No need	Not Allowed	To be held periodically	To be held periodically
Time taken for incorporation	6-12 Days	15-20 Days	15-30 Days	15-30 Days	15-30 Days	30-45 Days
Registration Cost	₹ 999/-	₹ 2,499/-	₹ 9,999/-	₹ 9,999/-	₹ 9,999/-	₹ 34,999/-

	Bootstrapping	Investment funding
Advantages	Full decision-making freedom and control over the company	Taking external support to grow
	Money would be spent more wisely	High profile investors (HNI’s-high net worth individuals)gives extra creditability to a venture
	Full focus on the business and the product	Faster growth
	Reinvesting profits earned	Huge skills & experience pool available
	Founders own little money but in hand	need to repay money invested (except equity)
Disadvantages	Not possible in all types of business formed	Misunderstanding between founder & investors
	Competitors with better funding will have better chances in the market	Loss of control over the company
	Slow growth	Various restrictions about payments, equity involvements in decision making
		Founders own smaller shareholding
		Less financial discipline

Business-to-Business (B2B)

Business-to-Business (B2B) is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business refers to business that is conducted between companies, rather than between a company and individual consumer.eg Alibaba, Amazon Business

Advantages of B2B business model

Market Predictability
Better Sales and less competition
Lower Costs

Disadvantages of B2B business model

Limited Market
Lengthy Decision
Inverted Structure-consumers hold more power and decision making power than the sellers.

Business-to-Consumer (B2C)

Business-to-Consumer (B2C) to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.eg. e-commerce portals such as Amazon, Flipkart, and Snapdeal.

Advantages of B2C business model

Lower Cost
24/7 shop and search possible
Sharing information directly with consumers

Disadvantages of B2C startup business model

Security
Limited Interaction or lack of physical verification of products in some cases
Competition

Consumer-to-Consumer (C2C)

Consumer-to-Consumer (C2C) when consumers sell directly to consumers and the best and the oldest example for C2C transactions would be the classifieds section of any newspaper or auctioning a product or selling it via OLX

Advantages of C2C business model

Sellers and buyers are reachable and the transaction is mutual and effortless.
Is possible for one customer to be a seller as well as a buyer

Disadvantages of C2C startup business model

Lack of quality control and no guarantee that the good is worth the money paid.
While selling via C2C, you cannot be guaranteed that you will get the payment the consumer offered.
Improper shipping and exploitation of product.

Subscription Based

Subscription Based are based on the idea of selling a product or service to receive monthly or yearly recurring subscription revenue. They focus on customer retention over customer acquisition. In essence, subscription business models focus on the way revenue is made so that a single customer pays multiple payments for prolonged access to a good or service. The best and biggest example for this is service like Netflix and Hotstar who build a contract with different companies like HBO and offer their shows to end consumers in return for subscription fees.

Advantages of the subscription-based model

Huge customer acquisition and retention.
The business model also provides regular income.
This retains them for longer.

Disadvantages of the subscription-based model

A very large customer base to continuously pull in substantial revenue and to start the business.
While consumer retention is higher, the one who leaves early also leads to a substantial loss

On-Demand Business model

On-Demand Business model fulfills consumer demand on the basis of immediate access to goods and services. It is a business model driven mostly by technology companies. They’ve created efficient digital platforms that make more efficient use of existing unutilized assets and infrastructure at scale.eg. Airbnb, Ola, and Trivago. They provide all the information about tickets and hotel rooms instantly. Hence, people are able to book a room or flight without even physically looking at them.

Advantages of On-Demand Business model

Ease of use and convenience that it offers consumers.
By utilizing new technology, this business model is much lower in cost

Disadvantages of On-Demand Business model

On-demand business model mostly depends on freelancers and their behavior and screw-up also affect your reputation and business.
The lack of physical presence also makes it harder for consumers to trust you

Freemium business model

Freemium business model allows users to utilize basic features of a software, game or service free, then charges for "upgrades" to the basic package. It is a popular tactic for companies just starting out as they try to lure users to their software or service. It is a clever strategy of drawing the customers to their service with a free product along with making certain features exclusively available to premium users.eg Dream 11. It provides players to not only compete against each other but also gain profit or money when they invest money into their app.

Advantages of the freemium business model

Can help drive faster recurring revenue and profit growth than a paid-only model.
You also get to decide what you want to offer as free and what has paid service.

Disadvantages of the freemium business model

You need to be extremely persuasive to be able to convince your consumers
While many customers are ready to pay for your service to get the added advantage, there are many more that are ready to wait and get that advantage a week or month later than actually pay for it.

How to Decide What Kind of Business to Start with?

Before you start planning for the business form

How to choose which type to start?

How should one choose the appropriate form of business?

Basic Business Structures in India

Comparison of various company structures

Start Up Benefits

The Toughest Decision for Startups: To Get Funded or Be Bootstrapped