LLC & Partnership questions
Talk to an Accountant or talk to a SCORE Counselor.
An accountant can review tax consequences with you and an attorney can review legal implications with you. You will need to put the two pieces together and decide which is best for your situtaion.
Every state has different requirements for LLCs.
In my opinion, you are probbaly better off as an LLC or S corp. rather than a partnership. The LLC or S corp. should limit your personal liability more than a partnership.
For tax purposes, if you choose an LLC, the IRS will tax you as a partnership unless you make an election to be taxed as a corporation - and then chose to be taxed as a S corp. (many posts on tis already).
Do a C corp. I started as a sole proprietor naively saying - If I make a mistake, I will fix it. I will be reasponsible - bad job I will not bill. BUT !!! after 5-6 major clients (about $21,000 each) declared bankruptcy I almost lost my house and wife. Protect yourself - you may not do wrong but customers could. So previous suggestion - talk to attorney and accountant is good.
I had given some great information (for a site other than my own - LegalZoom), but seems that the moderators are more interested in keeping traffic on this site than on being helpful to small businesses.
Best of luck -- look into LegalZoom (sorry can't provide the link due to moderators)