I would like to start a software consulting company to hire software engineers who can be contracted for larger firms.
I already have a list of clients who would contract engineers from the company I start, just need the legal steps and also how to protect myself from litigations if any.
Any info would be of great help.
Seems you are on the right track. Setup an official corporation, LLC would probably be fine. You'll then need to get contract setup for between your company and your clients and contracts between you and your employees. You'll also want to get a couple different insurances, workers comp, general liability, professional / errors and omissions.
You'll want to get with a lawyer to get those all drafted. Those documents will probably be a couple thousand. You'll need a mailing address and a phone number and I guess you'll be up and running ;)