What you need to decide is what kind of corporation you want to set up. For a simple business, a Limited Liability Company is probably the best for a single owner. If you have partners, you may want to investigate a Limited Liability Partnership or an S-Corp. You probably want to shy away from a C-Corp strictly for taxation purposes unless you're planning something big like an IPO.
Here's a link to a comparison chart of the various incorporation entities ...
You should also read the book "Are You Ready To Incorporate?... Saving Time & Money Through Sound Business Tactics" to help you decide what to do about incorporating.
Book Description ....
The myth: Everyone knows that only big companies and rich people with lawyers incorporate!
The facts: The reality is that there are a variety of ways to incorporate which match whatever business or venture you are engaged in and incorporation is available to everyone who wants financial security and tax savings.
In this remarkable and comprehensive book, the Editors of Socrates provide everything you need to know about incorporation in a single volume dedicated to clarity, easy access to information, helpful hints, practical interview with experts and design principles to make information gathering simple and enjoyable. No other contemporary book contains so much – including the invaluable free CD provided with each book in which glossaries of terms, forms, checklists, special reports, interviews, discussion and more are provided.