Personally I never went beyond DBA when selling software because I don't want additional cost and hassle of maintaining LLC or S-Corp. People register LLC in D

Personally I never went beyond DBA when selling software because I don't want additional cost and hassle of maintaining LLC or S-Corp. People register LLC in Delaware because it's usually cheapest state, laws are most understood and there are plenty services to help you do that. For example, in SF LLC is at least $800 per year to maintain (http://sfosb.org/step-1-structure-your-business http://sfosb.org/step-1-structure-your-business). Protection benefits of LLC are vastly overstated. If someone wants to sue your business, they will. Merely defending a lawsuit can bankrupt the business, regardless of DBA vs. LLC status. It's true that if you loose and that results in damages awarded, in some cases damages will be limited to what LLC can afford. But in software business, where you sell $100 program or $100/year service, chances that someone can sue you for any significant amount of money are nil. That's why you don't hear about Word users suing Microsoft for millions of dollars because the software crashed and corrupted their work. For software business the only time it would matter in practice is if you were to take a big loan and loose that money. That is also unlikely because even if you were inclined to borrow recklessly, banks stay in business because they are able to assess risk of lending to you correctly. Also it's important to note that there are limits to limiting liability. Bernie Madoff ran LLC and yet he's in jail. LLC doesn't shield you if you defraud. The best way to limit you liability is: * don't to shady stuff * don't borrow to fund risky stuff