AZ: No, you don't have to form a corporation. There may be reasons to do so, depending on how much money you will make, what state you live in, and other factors, but those are the same factors that apply to forming any single-person corporation (e.g. lawyers, doctors, etc.). Unless your planning on doing something to cause you to need to hide behind a corporate liability shield (does this even work for S/C corps?), you don't need it to start out. Give an accountant a couple hundred for a consult to tell you the pros/cons. Additionally, corps have to pay professional exchange fees, which can amount to hundreds of dollars a month, depending on what you trade and whether you want to have a backup platform (for which you must pay a second set of exchange fees).
You're getting some real bad information....you can "trade your own money" anywhere that has a retail account set up available. We have our traders use that account while they're studying for their exams. There is no "4 month employee" restriction...there is a 4 month "window" for you to take your exam. Feel free to call if you have any specific questions that I can help with. Don
Most traders form LLCs, not S corps. Even if they trade their own funds, and act as the sole client. This is generally for liability protection, as the benefits of pension or health insurance do not apply.
I don't know where you got the idea that Hold or Assent do not require a series 7 for prop traders, but I know for a fact they do. I worked at Assent, and now run a group at Hold and both firms require both the 7 and 55, unless you are a customer trader then it is not required, but you are subject to PDT rule (maintaining 25K in capital), and can only recieve reg T leverage (4 to 1 intra-day and 2-1 overnight).