I've gone through this process- I'll tell you what I did and how I did it.
I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
1. I did it myself. It took me 30 minutes to fill out the LLC paperwork. This saved me $300-$500. I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
2. A LLC and an incorporation have different requirements. Both protest your assets in the event of a lawsuit, but you're not doing business-- this is for NFA. So the lawsuit protection isn't all that necessary. Next point- cost to set up and maintain. The incorporation is less expensive to set up than the LLC but it requires yearly filings and yearly fees to keep it alive. The LLC is more expensive in the front but doesn't have yearly filings and yearly fees. Thus, I went with the LLC. I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
3. You'll need to get your entity an EIN to handle the NFA excise tax. I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
4. You can have more owners with a incorporation than a LLC. If you want to be able to legalize multiple users, the incorporation has definite benefits here. I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
5. You'll need to do profits and losses for any business on your taxes. If you're not in business, you still need to mention something like you're not doing anything with it, etc. I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
6. Pick your name carefully. Corporations of all stripes don't have tax privacy like a living person does. If you attracvt attention, you'll get it-- and then some. I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
That's about it! Remember, I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT.
Paranoid about being seen as giving legal advice when I AM NOT A LAWYER AND MY WORDS WILL NOT HOLD UP IN COURT,
Mike