Do I need to actually make my business "official"?

Selected answers from the Dumb SEO Questions Facebook & G+ community.

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  Webado C Webada: Oh well if you were the prospective client would you throw money at an unknown entity that cannot prove its legitimacy ? I wouldn`t. Of course it all depends on what type of business you are in. But for an online business, where you sell something on the internet, you need to be legit.
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  Kiana Jackson: Thanks for your reply! I have a few clients at the moment, but I`m more looking at this from a legal and business person point of view. I`m interested in how other people have chosen to move forward with their business and how it`s worked out for them.
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  Alan Bleiweiss: I chose my name as my business identity, because it allowed me to just throw my site up and start making money. However that was based on having built a strong personal brand identity. I`m now semi-retired, living at the beach (literally), and bringing in over $200,000 a year. All my income goes through my social security number. There are advantages to creating a unique business entity from a legal and taxation standpoint, however, and only a proper discussion with a business attorney and CPA can provide you with the options/choices that fit your goals and needs.
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  Webado C Webada: Again, it depends on what type of business it is. If you are a small fry you don`t want to go and hire a lawyer and a chartered accountant to incorporate a tiny cottage business, that`s very costly and won`t bring any benefit at all until such time that your business is really big and bringing in a lot of money. No idea how much but it`s likely several tens of thousands a yer. But one thing I`d make sure to do is register the business name with the local government authority. If you have some income from the business, fine, you file taxes as self-employed in addition to income from wages, pensions, investments, etc. Of course it depends on the country you`re in. In Canada you need to collect and remit sales taxes on any goods and services sold, with very few exceptions. On the portion of income from self-employment you can have deductions of expenses, and the income tax rate is part of that for the entire income for the year. It makes no sense to incorporate the business until it produces a lot of net income. No idea what the figures may be, but if you only make, say $10K a year, it`s likely not worth incorporating. Other than the cost of incorporating which runs into the thousands of dollars, there are annual costs related to accounting and auditing requirements which can wipe out any business income you may have made. Again I`m talking from the POV of a Canadian resident, in other countries the fiscal laws me be totally different.
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  Steve Gerencser: Let`s not forget that a lot of the rules are dependant on where you live.
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  Cristian Sepulveda: Your brand is so important. I think that a bussiness must show to your customers as much pro as you can.
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  Arsen Rabinovich: Easy... Legalzoom.com read about and start an LLC (pass through income). Gives you the protection you need without dealing with all the C and S Corp crap. Once you get big you can change it so that your LLC is taxed like a C Corp.
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  Webado C Webada: It depends on the country :)
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  Jeremy L. Knauff: You should. It gives you a tax advantage and legal protection if you do it right. Based on the fact that you`re asking this question—and don`t take this the wrong way, but based on that fact, you need to hire a professional to set it up properly. A small mistake can eliminate any advantages or protection, and can even end up costing you more in the long run.