I'm about to start a side project with a collaborator I haven't worked with before and we expect it to generate a small amount of revenue. I'm thinking of incorporating as an LLC once we're done building to protect us both.<p>In past projects that didn't involve money this didn't seem necessary. Has anyone else done this for their side projects? What about bank accounts?
I think whether to incorporate early or not depends more not on revenue but on risks of being financially liable. In other words, if it's a straightforward service or product you are going to deliver with your collaborator and you cannot imagine a massive debt or litigation, or explicit contract that deems you liable for a potential financial loss of your customer due to using your product or service — then incorporating can be an extra burden.
Incorporate, only if/when it begins generating revenue. As of the other concerns, I keep separate emails, hosting servers, SaaS subscription, PayPal/Stripe/Payoneer/bank accounts for every side project that might bring in revenue, even negligent.
IP ownership comes into play if you don't. iirc you both "own" the IP/source code/etc and things can get very messy if one of you wants to go forward with the idea and the other doesn't.