I will be an independent contractor to a fortune 500 company next month. The company only pays corporations and therefore I've had to request an EIN number. I did that as a Sole Proprietor and I will soon register my company as an LLC in the state of South Carolina. I have to fill out a form that asks for the Organization type with these options charitable, government, Incorporated. Obviously I am not a charity nor am I a government entity, which leaves only Incorporated. Am I going to have to incorporate my business or is this only a formality that will not bite me in the future?

Which or who's form are you filling out? I am assuming you are talking about a form that the fortune 500 company gave to you.

If they only deal with Inc's then you will probably need to set up a corp.

Ask them if they will deal with an LLC, then based on the answer you can decide which way to go.

Just make sure the extra burden of a corp is going to be worth the business you would gain from dealing with this company.

Hope that helps.