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Unless your customers need you to incorporate, the idea is to incorporate when you start seeing potential liability. One of the earliest sources of potential liability, is when you hire a W2 employee (in the US). So that is a great time to incorporate i.e. before hiring your first W2 employee. And if you don't intend to raise money, issue stock, or setup international offices any soon, then LLC is a far simpler, cheaper (taxation at exit) structure to setup.

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The LLC is great for smaller businesses and startups. Which is why it's a shame countries like the UK and Canada have no such structure and business owners are left to choose between sole proprietorship and a corporation. I have lived in both of these places and I know the governments in both talk a lot about promoting small business and entrepreneurship but talk is easy, they need to do the work necessary to make company structures available that would work for this group. I have written to the relevant UK government department and received no response.

I’m not too sure what problems you feel a UK private limited company has. It’s super easy to set up, requires minimal paperwork, and indeed most IT contractors I know work through their own limited companies.

They have no other choice. A private limited company is like a US corporation, it doesn’t have the pass through income an LLC does.

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