The type of business entity that you want your company to be is extremely important. [1] Findlaw is a great site to help walk you through the decision process. Hitting just the highlights, sole proprietorship leaves you exposed liability wise, an llc helps shield your personal assets, but remember to make sure you keep the books seperate from your own. C Corporations are beneficial if you are going public, but otherwise are a little more difficult to manage because of the potential for double taxation and bookeeping requirements. After you do your own research and come up with a general idea of what entity type you want to be, make sure you consult with an [2] attorney.