How can a group of potential co-founders start working together and start a company?

Hi everybody,

I am a software engineer and member of a small team of entrepreneurs based in New York. We have a great idea for a product that solves a problem many users of handhelds have today and that could easily be expanded into the growing wearables market. We would like to start a company and develop the product, but we would first want to sort of test if we work together well, and if the team is right for the project at this stage.

What is a good way to form a company at this point, were we do not really know 100% if we want to do this full-time in the current constellation? Should we already start a proper company like an LLC and somehow allow for "easy exit" of a co-founder? Or should we just work together without any legal steps and develop a prototype first? In any case, taking on other co-founders down the way should probably remain an option. As we are not a full company yet, it is also important that legal costs are minimal.

Thank you for your comments!

Liz