My question is - do I now need to file for a business name, Corporation vs LLC, or any legal things? This is my first time releasing a service/product and have no idea where to start, can any one assist me?
The LLC allows you to enter into contracts as your firm and not you yourself. If any arrangement you enter into ever blows up and threatens you with tens of thousands in liabilities, the company eats it, not your home equity. If you're savvy at negotiating, you can even get some of your overhead expenses (rent, Internet) in the LLC's name, so if the firm dies you're not on the hook.
Having an LLC also makes it possible for you to do business-to-business transactions with big companies. Consultant friends of mine have learned that invoicing a bigco as a sole proprietorship is likely to end up with that bigco withholding taxes, or worse, severing the contract altogether.
The reason not to spend money now is that contract liability protection is really the only thing an LLC is getting you. Most of what you're spending legal dollars on with a new company has to do with equity allocation. With neither partners nor investors, there's no reason to get that stuff nailed down perfectly. In fact, should you ever raise a round, chances are you're going to rip all your current incorporation stuff up anyways.
But otherwise, an LLC is the way to go; you might however want to elect to have the LLC taxed as an S-corp so you don't get taxed twice.
Don't bother forming a corporation, renting office space, or even making business cards when you don't have any customers or revenue.
It's perfectly acceptable, and the recommended approach, to simply operate as a Sole Proprietorship (no legal entity for the business, just self-employed income for you) until you have a REASON to form a corporation -- things like, to mitigate liability, to hire employees, to take on investors, etc.
As a sole proprietorship, you can still do business under a company name - this is called DBA, "doing business as". So if you go to get a business bank account, for example, you can open the account under the name "Firstname Lastname DBA MyCoolInternetCompany". You can also get an EIN or TPIN (employer ID number, taxpayer ID number) from the IRS without an official business entity.
Later on, once you have customers and revenue, you can then form an LLC for a few hundred bucks depending on which state you are in. You can do this first, of course, before actually starting your business and getting revenue/customers, and many people do -- but it's a common mistake for new entrepreneurs to focus on the fun/exciting stuff like making business cards etc instead of the boring but critical stuff like, you know, actually making money.
Apply for an EIN. Otherwise you will be spraying your personal social security number all over the place.
Your income and expenses go on Schedule C of your tax return. You pay income tax on your profit and you also pay self-employment tax. If you do well, expect your tax bill to hover around 50%.
Disclaimer - IAAL but all of that stuff I just told you is off the top of my head and probably wrong. Call up your local bar association. They probably have a referral program with cheap initial consultations.
Get a good accountant. If you are in San Jose on Dec 11 2014 attend the CalCPA Startup Conference and schmooze. http://calcpa.hs-sites.com/startup14-hacker
I didn't have a separate business bank account for, hmm, ~7 years. It is skippable.
How to start a startup legal lecture http://startupclass.samaltman.com/courses/lec18/
How to file in delaware http://corp.delaware.gov/howtoform.shtml
Types of companies http://www.bizfilings.com/learn/compare-company-types.aspx
Limiting your liability by setting up an LLC, or other liability-limiting entity, is worth the peace of mind, at least it is for me.
In summary, if spending $100 is no sweat, sure get an LLC.
--not a lawyer--
tl;dr the courts may see through the LLC "veil", determine the "company" is really just you, and may stick you with any liabilities/debts.
Once you gain traction or see you have revenue growing then form an LLC . . . I would only form a corp if you take on investment or your accountant recommends it.
