If you don't have the money to start an LLC or Corp or very limited cash flow then stick with a sole proprietorship.  It will cost you less money initially but if your business is very small then it won't really matter.  Once you start growing then you should incorporate or form an LLC.  The initial costs and fees of forming a corp need to be weighed in as part of your decision.

Thank you phanio and GoodFTA for your input! PinkLady777- There are pros and cons for structuring your business as a sole proprietorship or corporation. If you are not familiar with business incorporation, you should check out our blogs: Differences in Legal Structures- Which Structure is Right for You? and The Better Choice for Entity Selection: LLC or S Corporation? Please let us know if you need more information and tell us how your business turns out! Message Edited by ChristineL on 11-11-2009 10:01 AM

That is the whole purpose of an LLC - tax benefits of a sole proprietor with the liability protection of a corp - plus none of the other requirements like payroll or annual meetings of the corp. You might even think about an s-corp.

the most common is probably an LLC.  It offers the protection of 'limited liability' with a basic tax structure.

Sole propertership is not enough trust me, if you are looking at your business as a STABLE source of long term income, or if you are thinking of expanding, diversfing, or if you make over 25,000 a year in online, or real world brick and motor type businesses you need to incorporate. This is why I think so. You need structure, you need the protection a corporation offers from tax to legal. Remember if you are a sole properator and you get sued, by anyone for anything, your house, your car, your savings, cheqing account can all be seized, put a lean on it, ruin your financial state of being, and kill your financial future. If you own a corporation, they sue the business, your own financial accounts, might still be somewhat in danger, but not to the degree that a sole properatiership gives you. Incorporating also allows you to say, write expenses off, and save money, computers, gas, cafe bills and so on, as long as they are 'Acurate business expenses' :) But yes, my advice, incorproate, in the USA its crazy cheap to do this, and it will make you seem a) more professional b) give you tax breaks c) give you access to more avenues of funding d) protect you moreso legally Do it!

I agree with the above, you should get INC. or LLC either is fine. This will allow you to setup your business separately from you, and at that point you can start establishing business credit to learn more ..strongbusinesscredit.com ...// You want to get financing anytime you need it, but only thru the business so you are not on the hook.. Hopefully this helps you out...//