Original sample response
1. The two purchases arose at different legal stages
A corporation's legal existence generally begins when its articles become effective upon proper filing, not simply when an organizer puts them in the mail. The first inventory contract preceded successful filing. The second followed incorporation. Supplier must therefore identify the basis of liability for each debt instead of assuming the later corporate status retroactively shields every earlier transaction.
2. First debt: promoter and preincorporation liability
A person contracting for a proposed corporation can be personally liable on the preincorporation contract unless the parties agree otherwise. Beth signed in a purported officer capacity while the corporation did not yet legally exist. Merely adding a corporate title does not necessarily make a nonexistent entity the only obligor. Supplier has a strong promoter-liability theory against Beth for the unpaid balance of the first purchase.
Under statutory formulations requiring knowledge of nonincorporation, Beth can argue that she believed Anne had completed the filing. The governing jurisdiction is not specified, so the distinction between common-law promoter liability and a knowledge-based statutory rule should be made explicit. Anne did not sign the contract; her personal liability does not follow solely from being named president in the unfiled articles.
Supplier may alternatively argue that Anne and Beth were co-owners carrying on a business for profit before incorporation and therefore partners. Buying initial inventory ordinarily falls within a retail partnership's business. If a partnership existed and Beth acted with ordinary-course authority, both partners may be liable for its obligation. Anne and Beth can answer that they undertook the venture exclusively as a proposed corporation and relied on the attempted filing. Whether their conduct nonetheless created a partnership requires analysis; subjective rejection of the word partnership is not automatically decisive.
3. Corporate adoption does not itself release Beth
Once incorporated, Toy Shop kept the inventory, continued the business, and made payments consistent with accepting the first contract's benefits and obligations. Supplier can argue implied adoption. A corporation cannot technically ratify an act as a preexisting principal when it did not yet exist, but it can adopt the contract after formation. Adoption can make the corporation liable. It does not, without a novation or equivalent agreement by Supplier, automatically release a personally liable promoter. No express release is stated.
4. De facto corporation and estoppel defenses
Where recognized, de facto corporation protection generally requires an enabling incorporation statute, a good-faith colorable attempt to incorporate, and use of corporate powers. Completed articles, an erroneous mailing, prompt correction, and operating under a corporate name support good faith and an attempted corporate organization. Supplier can argue that mailing to the wrong address never amounted to the required sufficient attempt. Modern statutes may limit or displace the doctrine.
Corporation by estoppel is a separate argument: Supplier knowingly contracted with the business in a corporate name and may be prevented from denying that status to impose personal liability on the organizers for the same transaction. Supplier can respond that the dealings do not establish an agreement to look solely to corporate assets, and that applicable law preserves promoter liability. These defenses should be evaluated rather than dismissed merely because the enterprise failed.
5. Second debt: ordinary corporate liability
By the second purchase Toy Shop had been successfully incorporated. Inventory purchasing is ordinary business for the corporation, and Beth's treasurer/secretary title, prior dealings, and the business's receipt of the goods support actual or apparent authority. Toy Shop is liable for the unpaid $30,000. Anne and Beth ordinarily receive limited liability for this later corporate obligation unless they guaranteed it, incurred independent liability, or Supplier establishes grounds to disregard the entity. No personal guarantee is stated.
6. Veil piercing requires more than a failed venture
Supplier can emphasize the minimal initial capitalization relative to inventory obligations and the failure to conduct meetings or observe organizational formalities. These facts support investigating whether the corporation was an alter ego and whether respecting its separate existence would produce an inequitable result. Both owners' participation and control matter.
The defense is that business losses, competitive pressure, and insufficient cash do not alone establish abuse of the entity. The facts do not state commingling, personal diversion, fraudulent asset stripping, or an express attempt to evade an existing obligation. Installment purchasing and a small initial capital contribution do not automatically prove the business was fraudulently undercapitalized. Failure to hold meetings is relevant but should not become an automatic forfeiture of limited liability.
Conclusion
Toy Shop faces liability for the later debt and likely the adopted earlier contract. Beth faces a substantial first-contract promoter claim, with knowledge-based statutory, de facto, and estoppel defenses where available. Anne's first-contract exposure depends particularly on the partnership theory and applicable formation doctrines. Personal recovery for the later debt requires an additional basis such as veil piercing, whose success is arguable rather than established by insolvency alone. Supplier cannot collect the same unpaid debt twice.