Comment by diarmuid

There are two main reasons to incorporate - the 1st is to shield your other assets from liability - this is more or less important depending on if you have substantial assets and how likely the business is to incur liability (everything has some risk). The second is that with good accounting practices and proper structuring it is often the case that running a business as a legal entity will be more efficient for tax purposes - but this only starts to matter as your business starts to really make $.