I am about to self publish for the first time. Is it common to create a registered company when you self publish? I like the idea of separating my book revenue from my regular revenue and having my own bank account just for any book revenue as well as website or book-related expenses. Has anyone else done this when self publishing?
I've self-published three books. Yes, I created a company for this.
I don't know where you live. The legal steps to create a new business are a lot more involved in some places than others.
Here in Michigan, United States, all I needed to do was fill out a form and file it with the county clerk, pay a modest fee, I think it was $50, something like that, and my business was registered for five years. Then I have to renew it every five years. Basically that just says that I'm allowed to do business under the company name.
My business is also registered with the U.S. Copyright Office and the Library of Congress as a publishing company. I used the business name on my last two books for the imprint, i.e. the title page says "Published by" my business and the logo on the spine is my logo.
When I lived in Ohio I created a business -- not related to writing, but that's not the point -- and there was a little more paperwork and a little more cost, but still in the same ballpark.
I'm talking here about creating a sole proprietorship. That is, the business is just a name. Legally, your money and the business's money are the same. When you do your taxes the business income is added in to your personal income, etc. If you want to create a corporation or a limited liability company, that's more work.
In response to your comment about using a pseudonym:
The following is excerpted from the instructions for filling out the form to register a copyright:
What Is a “Work Made for Hire”? A “work made for hire” is defined as (1) “a work prepared by an employee within the scope of his or her employment”; or (2) “a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the works shall be considered a work made for hire.” If you have checked “Yes” to indicate that the work was “made for hire,” you must give the full legal name of the employer (or other person for whom the work was prepared). You may also include the name of the employee along with the name of the employer (for example: “Elster Publishing Co., employer for hire of John Ferguson”).
“Anonymous” or “Pseudonymous” Work: An author’s contribution to a work is “anonymous” if that author is not identified on the copies or phonorecords of the work. An author’s contribution to a work is “pseudonymous” if that author is identified on the copies or phonorecords under a fictitious name. If the work is “anonymous” you may: (1) leave the line blank; or (2) state “anonymous” on the line; or (3) reveal the author’s identity. If the work is “pseudonymous” you may: (1) leave the line blank; or (2) give the pseudonym and identify it as such (for example: “Huntley Haverstock, pseudonym”); or (3) reveal the author’s name, making clear which is the real name and which is the pseudonym (for example, “Judith Barton, whose pseudonym is Madeline Elster”). However, the citizenship or domicile of the author must be given in all cases.
I self-published a non-fiction work, not a novel, but much of your questions apply to both.
I did not create a separate company, but it might not be a bad idea if you plan to make a real business out of this (which is a good mindset to adopt). In my case it wouldn't have been worth it, but that's a reflection of my being insufficiently committed to the process to self-publish successfully.
Kindle is a common place to start because it has a large audience, and potentially doesn't cost anything. If you're only interested in ePublishing that's a bit of a different question than if you want to self-publish physical books.
Dan Poynter's "Self Publishing Manual" is oriented towards non-fiction, but it's an excellent overview of the business of self-publishing by someone who actually did it successfully.
My own personal advice is to self-publish if-and-only-if you are a gifted and dedicated salesperson, fully prepared to treat your book as a product that you will have to market and sell entirely by yourself.