CARRYING ON A TRADE BY MARRIED PERSONS

By Mahlet Mesganaw, Partner at DMLF

The Commercial Code of Ethiopia Proclamation No 1243/2021 lays the manner of conduct of commercial activities by married persons. The Code also lays down the procedure of objection of the trade of the other spouse and consequence of debt on common and private property of the spouses.

A trade carried on by a married person shall be regarded as a joint enterprise of the couple. However one  spouse has the right to object to the fact that the trade is not a joint enterprise but a trade solely applying to that particular trading spouse. Such an objection, as between spouses, may be notified to the trading spouse in any manner. This means the objection can be verbal, written or by conduct. Nonetheless, such objection shall not affect third parties, other than those who are aware of its existence, unless notice of such objection has been entered in the commercial register. 

The trading spouse is given the right to apply to arbitrators to set aside the objection. Where the trading spouse is of the opinion that the objection affects the interest of the family, she may apply to arbitrators to set aside the objection. If successfully set-aside, the spouse for whom the objection was set aside shall enter a notice to this effect in the commercial register. 

Debts contracted by the trading spouse shall be deemed to be debts of the marriage and may be recovered on the personal estate of each spouse and on common property. However, where an objection has been entered in the commercial register or the existence of the objection is known, debts contracted by the trading spouse may be recovered on her personal estate only. The common property or the personal property of the non-trading spouse will not be affected. 

Where spouses carry on a trade in cooperation, the debt incurred by the trader spouse shall be deemed to be a matrimonial debt that is recoverable from the common property of the spouses and the private property of each spouse unless it is shown that one of them is the employee of the other.

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