Forming a limited company is recommended when you want to do business, because it separates your private financial destiny from that of your company. Should your company go bankrupt and have lots of unpaid bills and loans, you won't have to pay them with your private money. Only the money you invested in the company will be touched.
Unless, of course, you perform illegal misconduct. Depending on what exactly you did (or did not), you can be made liable. So inform yourself about your local laws in this regard, especially (but not only) tax laws. Corporate tax fraud, even unintentional, is something the authorities in most countries have absolutely zero tolerance for.