Here are my suggestions for choice of entity for your startup.
Your choice of entity depends on your goals as a founder and on timing.
If you are a solo founder working out of a garage, save your legal dollars and hold off on setting up an entity.
If you are out interacting with the world, consider setting up a form of entity that will shield you from personal liability.
Realize a few things about limited liability though. It really functions like an insurance policy against the disaster and nothing more in most cases.
Let’s illustrate this.
If you have a strong company, are you going to fold it just because you get hit with a lawsuit? Of course not. You are stuck defending the lawsuit. You will pay all the legal fees needed to defend it. You will pay any judgment that might result from it. You, meaning your company. Are you better off financially in that scenario from having had limited liability protection? Not a bit. You feel the full burden of the liabilities associated with that lawsuit just as if you were a sole proprietor with unlimited liability exposure.
If your startup takes out an equipment lease for your startup, and the lessor insists that you sign a personal guarantee, you will have all the exposure on that liability that you would have had as a sole proprietorship. The liability shield offered by your entity is not helpful here.
The same is true for an office lease or any other potential liability for which you will be required to sign a personal guarantee.
Founders hate legal complexity and for good reason. It gets in the way of their primary goal of devoting their resources to building a great business. What is bad, though, is not legal complexity but needless legal complexity. Sometimes it is necessary to set up a startup structure that is more complex than other alternatives because it serves important goals.