I'm working on a site that will require users to register and I'm not sure if I should be incorporated before collecting any personal information from someone. I'm trying to balance this being a "side project" for me with fears of litigation. I don't feel like my site is at any more or less risk of being sued than any other - so my question is what would be considered the 'appropriate' time to incorporate?
Do you have any legal business status at all? Are you a sole trader and now you'd like to set up a LLC or you're just a natural person? If the latter, I think that you should to register your status first. You need to weigh the pros and cons of being a sole trader or having an LLC company to decide on the appropriate form of doing business for your case. By the way, there's a thread on this page (http://www.webmasterworld.com/forum31/2205.htm) that deals with this issue.
It is best to incorporate any business as it remains best for accounting purposes. The Incorprated Company becomes like a "person" created and it is a seperate identity. Not to mention that you are protected from all the liabilites of the same. The Raising of funds becomes simple and you can allot the shares to friends and relatives and raise the capital