Divorce-proof your business

Based on the Constitution, when you register your marriage or form a business, you create a new legal relationship. Marriage means you and your partner’s money and property are connected in a way that they were not before, which couples who are not officially in a relationship may not know.

Mr Charles Nsimbi, the manager for civil registration at the Uganda Registration Services Bureau (URSB), says marriage in a business helps to pull resources. You have two people working on something other than one. He notes that clearly, if its capital or human capital, you need to put in a business, you now have double if you are legally married, so marriage definitely helps.

He says that a legal marriage confers responsibility and obligations to the individuals. That without it, people will not clearly trust that relationship, and that is why you find a person building rentals quietly.  Cohabiting couples miss out on the mutual investments together.

Mr Nsimbi asserts that each member is not protected, the right and obligation of each spouse in quotes are not protected if the marriage is not legal. Definitely, a registered marriage is important, as you get two people who can invest together because they all have defined rights and obligations with penalties. You both know what will happen if the marriage fails.

He says if someone dies, it is still clear on how to resolve the issue. Non-official relationships are amorphous just like anything else. If the business is not registered, you will still get many problems if you cannot comply with certain things. 
“If you have a legal marriage you are more likely to get a mortgage easily, or a loan because you are simply two people as opposed to one. If banks recognise that it is better to be two people than one, then marriage helps in a business,” Mr Nsimbi says.

He added: “The family is the basic unit of society. If you are going to build a business or anything you need to expand, you need to start at the basic unit. If the family is unstable, irregular or not governed by law, why would you expect anything developmental to happen? We all come from a family. If you sort out a family, it is the beginning for betterment of anything else”.

Marriage affects your legal rights in several ways:
According to an attorney on family matters who preferred anonymity, when you were single, you owned your bank account and anything you bought with it. 

He asserts that when you’re married, the general rule is that everything you earn or acquire during your marriage belongs to the two of you jointly (although there are exceptions and variations depending on the state you live in).

When it comes to business (joint ventures between husband and wife or a business where a spouse contributes), the marriage is an ‘insurance policy’ of sorts for either spouse upon the unfortunate death of the other or in the event that the husband or wife wish to leave the marriage.

He says this is because under divorce, inheritance and succession law in Uganda, a spouse is recognised as a person entitled to property acquired or created during the marriage or to a share of the same (depending on the circumstances).

The headache of litigation
If a couple or business partners being man and woman are not married and jointly invested, it is usually an uphill task to prove either partners stake or investment in their joint business ventures given that the law caters for spouses (persons married under the marriage laws of Uganda). 

He mentions that there are also other benefits that a marriage brings to joint ventures between a couple. However, these are not necessarily legal, for example, concerted effort, larger labour and resource/capital pool, amalgamated goodwill to mention but a few.

“Two heads are better than one, coupled with ‘security’ that comes with marriage make it a good consideration to protect a spouse’s joint investment or contribution to a business. 
However, in this ever changing world, the foolproof way to approach any business venture is to consult a competent advisor on the ideal business vehicle or parameters to protect one’s interests or contribution,” the advocate says.

Other than that, he says the considerations for joint investment in a business are usually more sentimental than others. Maybe for transparency and trust between the partners. That sometimes the way he would look at it is goodwill, different partners have different goodwill.
One partner may be strong in selling a particular product, while the other partner is more known. 
“If we do a business, that brings together the collected goodwill and strength of a brand,” he says. 

Doing business as a married couple requires that you document everything on paper to limit conflicts. 

There is also capital consideration when one member of the couple does not have the money. But for transparency, the couple can do a joint venture and agree that everything is put on paper and accounted for.
He states that the issue of the partner who was not legally married may lose out usually depends. For example, if a man and a woman own a hardware jointly and the woman has always been at the store and people are used to dealing with her, even having to specifically prove that she is a member of the company, by virtue of her position, as an attorney, he says, he does not think it will be hard for her to make her case that she indeed invested in the business.

This advocate cautions that the most important thing to look at is at the time they got married, or during the subsistence of their marriage,  “what businesses have they come up with jointly? Or what effort has been made by one partner into another person’s business?”

The proof of this can be through physical man-hours.  If you are at the sales desk, you can say, “I invested in my husband’s property.” If a couple is either living together or not, one used to handle the sales, so he or she may have a claim.