What is the best way to protect personal assets when I start a small business?

The best way to protect personal assets when you operate a business is to first set up a corporation.  After the corporation is set up, you should keep your business and personal finances separate from each other.

The liability protections offered by the corporate structure are only effective if the corporation is operated as a separate entity, completely severed and distinct form its shareholders.

Complete and accurate records of corporate income and expenses, and  shareholder salary and distributions, should be meticulously kept.

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