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My rule is that if you have trouble getting things done, make the software and then worry about incorporation so you aren't tempted to waste time obsessing with paperwork. In other words, don't incorporate if when you incorporate that's the only thing you end up doing. If that's not the case, then you should incorporate right away. If you believe at all the project is to be successful, or that it might have liability issues, then you really need to properly take care of the things that will be much harder or impossible to do when more money is at stake, or there is a threat of a lawsuit or an actual lawsuit pending.

Also, a corporation won't entirely save you from liability. If you think you have a liability issue, you will want to get business insurance that covers errors & omissions and covers the actions of board and officers. And, you will want a personal liability/umbrella policy as well.