[browser411]

spoke to a "in the know" silicon valley lawyer about this a few days ago. two of the three triggers he mentioned are similar to the one posted by tandaraho: 1) when you need to limit exposure to liabilities (e.g., from customers/clients/users); 2) when you've developed intellectual property that needs to be assigned to an entity; 3) when your business partner(s) need firm clarity on where everyone stand.