(This has come up on HN before.)
But more generally, forming a corporation means that you have ongoing legal responsibilities to fulfill. Doing that without at least an attorney on call is probably a good way to create the impression that you aren't "keeping up appearances". Minutes, board-meetings, shareholder ledger. Etc.
Anyhow, none of this matters if you use an LLC. Lots less red tape and lots less chance of accidentally tripping up some legal requirement for an arms-length transaction.
It's easy to wind up personally on the hook for corp expenses: accidentally agree to a contract that puts you on the hook personally. But again, that's not a company formation issue.
I generally agree with you that LLCs are the right first step.
Can you re-phrase this in a way that's googleable? Thank you.
http://www.calstartuplawfirm.com/business-lawyer-blog/califo...
Generally speaking, you want to incorporate a C-corp or LLC in the state where you do business. Alternatively, you can use a biz-friendly state like DE and register as a "foreign" corporation in the state of your primary location.
None of this matters unless/until you get sued, and then it matters a whole lot.
DE is chosen because you can state in all of your contracts that disputes are resolved in DE which has a special business court that handles corporate actions. There are also some outside tax and compliance benefits.