It’s usually not too late to formally organize a going business, but the delay may result in unexpected or unwelcome requirements and costs. Everything from reopening the business’ bank accounts to obtaining a new business license to redesigning marketing materials in the entity’s name could result. There may also be tax consequences associated with the change in form.
All of the changes mentioned above result from the fact that the new business entity will be a completely different legal person with its own rights and obligations. So, even if you think of the business as being a mere extension of yourself, once you organize it, treating it as an alter ego of yourself or the other owners may be a mistake that could be used to remove the very liability protections afforded by many kinds of formally organized entities that most people seek when changing the way their business is initially set up.