Proprietorship, OPC or LLP
If you are one person starting out, three structures are open to you. Cost is the smallest difference between them.
The difference that matters is liability
In a proprietorship, there is no separation between you and the business. A business debt is your debt, and it reaches your personal assets. That is the whole trade-off, and it is worth understanding before optimising for setup cost.
An OPC and an LLP both put a wall between the business and you. They also both carry annual filings that a proprietorship does not, and an LLP's late fee has no ceiling. So the honest question is not which is cheapest to start but which cost you would rather carry.
Side by side
| Proprietorship | OPC | LLP | |
|---|---|---|---|
| Owners | One | One, plus a nominee | Two or more |
| Personal liability | Unlimited | Limited | Limited |
| Setup | Registrations only | Incorporation | Incorporation |
| Annual ROC filings | None | Yes | Yes |
| Audit | Above tax threshold | Statutory | Above threshold |
| Taxed as | Your own income | Company | Firm |
| Raising outside investment | Difficult | Restricted | Difficult |
| Winding up | Simple | Formal process | Formal process |
Written 5 September 2026. Government requirements and portal behaviour change — message us to confirm before you rely on any date or figure here.
How to actually decide
Choose a proprietorship if the business carries little risk of debt or claims, you are testing something, and you value not having annual filings. Most small service businesses start here sensibly.
Choose an OPC if you want limited liability while remaining one person, and you can live with company compliance. Note the restriction on who can be a nominee and the turnover and capital limits that force conversion later.
Choose an LLP if there are genuinely two of you. For one person it is not an option, and adding a token second partner to qualify creates a real partner with real rights.
Common questions
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