Creating a legal business entity will definitely be one of the meaningful steps that you can consider to take affiliate marketing seriously as a full-fledged business, for personal asset protection, credibility of your business, and ultimately for tax efficiency.

Business Entity: The rationale is that it protects personal assets from debt and liabilities the business incurs, among others.
Tax Benefits: These will differ according to the entity of choice your business takes.
Credibility: Provides legitimacy to your brand through formal business entity to source certain partnerships.
Professionalism: A sign that your business means business.

Entity Type Selection

Common types of business entities for a small affiliate marketing firm would be the following :

1. Sole Proprietorship:
Advantages: Easy to establish, less paper work, and flexible.
Disadvantages: Unlimited personal liability, limited tax advantages.

2. Partnership:
Advantages: Easy to establish, shared decision-making
Disadvantages: unlimited personal liability for each partner; complex tax implications.

3. LLC or Limited Liability Company
Advantages: It allows limited liability, flexibility in management structure, and pass-through taxation.
Cons: More complex to set up and maintain than a sole proprietorship.

4. Corporation:
Pros: Strong liability protection, potential tax benefits, easier to raise capital.
Cons: More complex to set up and maintain, double taxation corporate and personal.

Factors to Consider When Choosing

Liability Protection: How much risk are you willing to assume?
Tax consequences: What are the tax benefits and drawbacks of each form of entity?
Management and Control: How would you want to be in control of your business' decision-making?
Future Growth: What are your long-term goals for the business?

Legal and Financial Considerations

Business Name Registration: Pick a unique name and register the name with the State Agency.
EIN: This can be obtained from the Internal Revenue Service to give a business identity for the purpose of tax.
Business Licenses and Permits: Determine what licenses and permits may be required from local, state, and federal authorities.
Business Bank Account: Open a proper business bank account to keep the finance in flow.
You would not go wrong in seeking the views of a lawyer or even an accountant to ensure legality in all aspects that finances are duly considered, too.

With great due care on your business needs, you would want to heed expert views as to who to make the correct choice with an affiliate marketing business enterprise.