His recommendation is to set up the business as a "société à responsabilité limitée" or SARL. This is comparable to a "limited liability corporation" (LLC) in the US. I'll base the company out of our house to begin with.
I've heard that the process of registering a business isn't too difficult here in France but I have waited to do it because it seems a bit daunting to a non-native French speaker. Once I have the process underway I'll put together a template and make it available on the site for others. I'll keep notes of the process as well and post them so someone else could mimic this easily.