What Each Business Structure Costs to Run Every Year

The comparison everyone publishes, and the one you need

Search for a structure comparison and you get a table about formation. Minimum members, liability, capital requirement, whether foreigners can hold shares. All accurate, all essentially settled for a decade, and all about a single day.

The decision that actually costs you money is about the other three hundred and sixty-four. A private limited company that never issues an invoice still needs an audit, an annual return, a set of financial statements filed with the Registrar and a board meeting in each half of the year. That is a fixed cost attached to the structure, not to the business.

This article compares the running load. For the formation-side comparison, our Pvt Ltd vs LLP vs OPC guide covers it, and the tax comparison of Pvt Ltd and LLP covers the rates.

The annual filing load, side by side

The dates, which is where the money leaks

Late fees are the largest avoidable cost in this entire comparison, and they are avoidable purely by knowing four or five dates.

Late filing on any of these runs at ₹100 per day, per form, with no upper limit, and it applies equally to a company with no turnover and an LLP with no bank account. Two overdue LLP years is four forms running simultaneously. What that arithmetic looks like in practice is set out in what AOC-4 and MGT-7 default actually costs.

What actually drives your annual bill

Rather than quote a single number that will be wrong for your business, here is what the number is made of. Add up the lines that apply to you.

• Statutory audit — the largest single item for a company or OPC, and unavoidable at any turnover. For an LLP it is zero until the thresholds are crossed, which is the biggest single cost difference between the two structures at small scale.
• Preparation of financial statements — needed whether or not an audit follows, and driven by how clean your bookkeeping is. A year of receipts in a shoebox costs several times a year of reconciled books.
• ROC filing work — a company files more forms than an LLP, and the professional fee tracks that.
• Secretarial work — board meetings, minutes, registers, resolutions. Real for a company, negligible for an LLP, absent for a firm.
• Income tax return and, where applicable, tax audit — broadly similar across structures at the same scale.
• GST returns — driven by turnover, number of registrations and transaction volume, not by structure. This is often the largest recurring line and it is identical whichever structure you pick.
• Payroll, TDS and professional tax — driven by headcount, not structure, with one exception noted below.
• Government fees — modest and fixed, and dwarfed by the professional fees around them.

Current fees for each of these are on the service pages — Pvt Ltd annual compliance, LLP annual compliance, OPC annual compliance, partnership firm compliance and proprietorship compliance. Fees quoted anywhere on this site are indicative and vary with volume and complexity.

What 2026 changed about this comparison

The formation comparison has barely moved in years. The running comparison has moved twice in the last eighteen months, and neither change has reached the incumbent comparison pages.

An LLP now deducts tax on its own partners

Section 194T, in force from 1 April 2025, requires a firm or LLP to deduct 10 per cent TDS on salary, remuneration, bonus, commission and interest paid or credited to a partner above ₹20,000 in aggregate for the year.

For an LLP that has never held a TAN, that is a new registration, a quarterly return, and a monthly deposit obligation — a real increment to the running load that did not exist when the incumbent comparison pages were written. It is also the thing firms most commonly got wrong in its first year; see TDS on partner payments.

A company does not have this problem in the same form, because director remuneration was always inside the salary TDS machinery.

Every structure now has a data-residency obligation

Rule 46 of the Income-tax Rules, 2026 requires electronically maintained books to remain accessible in India at all times with a daily backup on India-located servers, and the new tax audit report makes the auditor disclose the server position. This applies by reference to how you keep your books, not to what you registered as. See Form No. 26 and the accounting software disclosure.

Choosing on running cost

Four honest recommendations, stated as decision rules rather than as a table.

• If you will raise institutional money, issue ESOPs, or take on more than a couple of shareholders, take the private limited company and treat the audit as a cost of being fundable. Nothing else in this list is investable without a conversion later, and conversions are more expensive than the audits you avoided.
• If it is a professional services firm, a consultancy or a family business with no external funding in view, an LLP is materially cheaper to run below the audit thresholds, and the gap is largest in exactly the years when cash is tightest.
• If you are a single founder, compare the OPC against a proprietorship honestly. The OPC gives you limited liability and a corporate identity, and costs you a mandatory audit and two ROC filings a year forever. If the liability exposure is genuinely low, the proprietorship is the cheaper structure by a wide margin — and you can incorporate later.
• If you are testing an idea, do not incorporate anything yet. A proprietorship with a GST registration costs almost nothing to run, and the compliance you avoid in the first eighteen months is compliance you would have been paying for on a business that may not exist.

The mistake that costs the most is incorporating early for credibility and then discovering the annual load on a business with no revenue. Late fees on a dormant company are the single most common avoidable expense we see, and they are entirely a structure decision taken too early.

The cost of getting out

Worth pricing before you go in, because the exit is asymmetric.

• A proprietorship stops by stopping. Surrender the registrations and file the final returns.
• A partnership firm dissolves by agreement, with a deed and the closure of its registrations.
• An LLP closes through Form 24, and every pending Form 8 and Form 11 must be filed first — so a neglected LLP has to be brought current before it can be closed. See LLP closure.
• A company closes through STK-2 strike-off, and again the backlog has to be cleared first. See OPC closure.

The pattern is consistent: the structures that cost more to run also cost more to leave, and the bill for the years you ignored has to be settled on the way out either way.

Key takeaways

• Pvt Ltd and OPC are audited every year at any turnover. This is the largest structural cost difference at small scale.
• An LLP is audited only above ₹40 lakh turnover or ₹25 lakh contribution, and files two ROC forms a year.
• Firms and proprietorships have no ROC filings at all.
• Late filing is ₹100 a day per form, uncapped, for both companies and LLPs — and it applies to dormant entities.
• Since April 2025, an LLP or firm withholds tax on partner payments. That is new running cost the older comparison pages do not reflect.
• GST and payroll costs are driven by your business, not by your structure, and are usually the largest recurring line either way.

Frequently asked questions