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If a customer has a legal issue with a small business, is he or she suing the business or the owner of the business?

That depends on whether the business is registered or is a limited company. In such case, the customer is suing the business. For sole proprietorship, the customer is suing the owner.
Like in most cases here in my region we don't sue small business kiosks, what we normally do here is sitting down with the owner and negotiating on the possible solution for the query.
 
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