Cengage Advantage Books: Introduction to Business Law 4th Edition by Timothy Koch, Jeffrey Beatty, Jeffrey Beatty, Susan Samuelson, Susan Samuelson

Exercise 13

Question: Mrs. Meadows opened a biscuit shop called The Biscuit Bakery. The business was not incorporated. Whenever she ordered supplies, she was careful to sign the contract in the name of the business, not personally: The Biscuit Bakery by Daisy Meadows. Unfortunately, she had no money to pay her flour bill. When the vendor threatened to sue her, Mrs. Meadows told him that he could only sue the business because all the contracts were in the business's name. Will Mrs. Meadows lose her dough
Strategy: The first step is to figure out what type of organization her business is. Then recall what liability protection that organization offers. (See the "Result" at the end of this section.)