However, you may run into transactions where the other side would want you to provide a personal guaranty. Landlords and banks are often queasy about working with brand-new companies. Therefore, they will want you to "guarantee" that you personally will make good on the debt if the company goes out of business. In those limited situations, your personal assets would be at risk.
Another way to ensure that you dont "risk the farm" is to put together a careful business plan and have sufficient funds set aside to get started, so you dont have to ask others to loan you money.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.