Almost down an MBA here.

Basically, it depends on your goals and the type of business.

you can literally say "I'm in business" and you are. No paperwork is needed to start a sole proprietorship. You just start cleaning gutters and keep your receipts and declare your earnings, and set some aside for tax provisions. The downside is that you can be sued for everything you own and your kids in the event that you kill someone accidentally.

A limited liability company is just that... limited liabiliy. There is a bit more paperwork and insurance premiums, but worth it. Just search online for your state.gov. There'll be a section for entrepreneurs and what you need to do. Pretty easy though.

A corporation is the messiest. A bunch of paperwork, naming corporate leaders and managers, starting a charter, having meetings and documenting minutes, etc. But the main downside is double taxation. However, you can raise capital if you ever decide to go public. Also, in the event of a lawsuit, the corporation is liable, not the officers or managers, if they are distinct.

You'll want to start a Subchapter S (lesser, easier version of a C corp) or LLC. The taxes are favorable and your personal assets are safe, AND they are not terribly difficult to start.

I have a small painting company. I do a little bit on the side as a sole proprietorship (an llc would be better because if little timmy every fell over my paint try down his stairs, I'm screwed) but I don't do enough work to justify it, so I have to be very conscientious about what I'm doing not to kill someone or ruin a Persian rug.

www.freewebs.com/mjmpainting