I have a site where you can register and get free directories(directory hosting, check my sig). Do I need to write an agreement that a user can read when he/she sign up? I don't think it's necessary since I don't run a registered business.
This is for the USA only. If you are conducting business, then you and/or your company can be held liable. By not having a registered business, you are operating as a sole proprietor, and possibly in violation of local laws. Therefore, you are personally liable. Remember, conducting business does not need to involve receiving financial considerations--even though yours does through ad sense revenue.