This question is more complicated than many people think.
Here are some important factors to consider:
 Your risk management strategy, including your exposure to litigation risks and the need for asset protection
 The expected size, growth and income of your business
 Whether or not you have a need for a nationally registered business name, e.g. If you want to operate under one name in more than one state
 Who will be involved in owning the business and whether or not you plan to introduce equity partners or shareholders in future
 Your career and work plans for the future, e.g. When you plan to retire, how long you plan to work for and if you are expecting to have time off
 The structure of your family and whether you have beneficiaries to whom you wish to distribute income
 The availability of reduced tax rates and other tax concessions (e.g. Capital Gains Tax concessions for Individuals) and how you plan to spend the money you earn.