There are two important steps you can take to protect your personal assets when starting a company. First, make sure you are operating as a corporation or a limited liability company. A local attorney and an accountant can help you work out which form will be best for you.

Once you form your business entity, make sure you follow all the steps that allow you to keep that limited liability "shield" in place: annual minutes, separating business from personal bank accounts and so on.

Second, make sure you have the right kinds of insurance in adequate amounts for your kind of business. Some business insurance policies provide legal defense coverage if you get sued and that will be vital to ensuring that you can keep operating the business without bankrupting it to pay the legal fees and a judgment. A qualified insurance professional can be an important part of your advisory team.

Related: A Step by Step Guide to Forming a Limited Liability Company
Related: The Lowdown on Business Insurance