Lisa Larue operated a beauty parlour under the name You Look Marvelous. Initially it was a sole proprietorship, but after being in business for a year, Lisa decided to incorporate as YLM Ltd

The bank with which she had been dealing for the past year demanded that she now sign a demand promissory note, which she did, as "Lisa Larue". When the note was not paid by YLM, the bank sued Lisa personally. Which of the following is TRUE?

A) Lisa is not liable. The whole point of incorporating was to obtain limited liability.
B) Lisa is liable because she did not make clear in the note that she was signing on behalf of YLM Ltd.
C) Lisa is not liable because the bank knew that Lisa had incorporated and therefore intended not to assume personal liability for the business's debts.
D) Lisa is liable because she is the sole shareholder
E) Lisa is not liable as the promissory note is void due to mistake

B