As a businessman, I already well know that: Taxation is theft. Sadly, due to monopoly of the state on force, we have to comply.
Jokes aside - in my country (and the same will apply for most, if not all, EU member states) you don't need to be a registered entity as long as you don't receive any money (you can't have employees, but you can have contractors) - your expenses are paid from your pocket and nobody cares what you do with your money (as long as you don't physically destroy it - that's a crime).
BUT you may consider being one because of expenses and/or VAT. Income tax is done solely on what you earn (you can have your business as “secondary activity” and therefore not pay social security/healthcare tax until you earn something) … yet you will have to formally explain why are your expenses higher than your incomes (which is normal in early years of almost every sort of business - due to investments). Employees are a different thing though - the moment you have them accounting becomes more complex (read nightmare) as you need to pay their social security, healthcare, income taxes and additional payments (special insurance in case there is a workplace, sick-leave tax) plus at least minimum income (note, taxes do make up about 50% of income expenses on every employee in my country). You don't have to treat yourself (business owner) as employee, but if it is your "primary activity" you have to.
In short - you have to investigate what you are legally bound to do. Legal advice is doing exactly that, and not a single bit more (as that will always just cost you).
