I wouldn't worry about this right now. Your biggest challenge is building your webservice and making into something people want. But to answer your question, it

I wouldn't worry about this right now. Your biggest challenge is building your webservice and making into something people want. But to answer your question, it's a matter of how much paper work you want to go through now versus later. To create a sole propiertorship and get a bank account under your name requires very little friction. Any income is just personal income and it's all simple & straight forward. This is how I started all of my startups (well one was as a partnership, but still similar procedure). Once you start generating some real income and from a taxation point of view, it's worth incorporating, then do so. Based on my experience in Ontario (Canada). YMMV.