Protecting Your Business Legacy: Strategic Asset Planning for Entrepreneurs

The Clause on the Loan Application Nobody Reads Closely

When a bank assesses a loan application from a business owner, it isn’t only looking at the balance sheet. If personal surety is required, and it often is for smaller and medium-sized businesses, the lender also has to consider the applicant’s marital property regime, because South African law has something to say about who can sign what.

Most entrepreneurs have no idea this detail affects their financing at all. It’s worth understanding exactly how, because it’s one of the more overlooked ways a marriage in community of property can complicate the very transactions that grow a business. Strategic ante-nuptial contract services in Pretoria exist precisely to remove this kind of friction before it becomes a problem.

The Consent Requirement Most Business Owners Have Never Read

Under section 15(2)(h) of the Matrimonial Property Act 88 of 1984, a spouse married in community of property may not bind themselves as surety without the other spouse’s written consent. Surety is exactly what most banks and suppliers ask for when extending credit to a small or growing business, since the company itself often lacks the asset base to secure the facility on its own.

This means that, on paper, a business owner married in a community of property needs their spouse to sign off in writing before they can personally guarantee a business loan, an overdraft facility, or a supplier credit line. If that consent isn’t obtained, or is later disputed, the surety itself can become vulnerable to challenge.

The “Ordinary Course of Business” Exception, and Its Limits

The Act does carve out an exception. Section 15(6) provides that a suretyship signed in the ordinary course of a spouse’s profession, trade, or business remains valid even without the other spouse’s consent. In principle, this should cover most business owners signing surety for their own company’s finance.

In practice, the boundary of “ordinary course of business” has been tested in court. In Strydom v Engen Petroleum Limited, the Supreme Court of Appeal had to determine whether a suretyship fell within this exception after a spouse challenged its validity. The case illustrates a point worth taking seriously: whether a given suretyship qualifies for the exception isn’t always obvious upfront, and a lender or creditor can find themselves defending the validity of a surety years after it was signed.

Why This Shapes What a Lender Is Willing to Offer

A lender assessing a facility that depends on personal surety has to weigh this uncertainty. Where a suretyship’s validity could later be challenged, the practical response is often to ask for the spouse’s written consent regardless of whether the exception might apply, adding a step, a delay, and another party’s cooperation to the finance process. Section 15(9) does protect a lender who reasonably had no way of knowing consent was required, but a well-advised lender would rather avoid relying on that protection than test it after the fact.

None of this uncertainty exists for a business owner married out of community of property. The consent requirements in section 15 apply only to marriages in community of property, so a spouse married under an ante-nuptial contract can sign surety, mortgage assets, or bind the business to credit terms without a second signature or a legal grey area attached.

The Knock-On Effect for Succession and Sale

The same clarity carries through to decisions further down the line. Share transfers, buy-sell arrangements, and succession planning all move more smoothly when business equity sits outside a joint estate that would otherwise require a spouse’s involvement in decisions about it. Whether a business is being restructured, brought in a new partner, or eventually sold, a marital property regime that keeps business assets clearly separate removes a layer of complexity that a joint estate would introduce at exactly the point it matters most.

Gereelde Vrae

Does the “ordinary course of business” exception always protect a suretyship signed without spousal consent? Not automatically. Whether a suretyship qualifies has been tested in court, and the outcome depends on the specific facts, which is exactly the kind of uncertainty lenders prefer to avoid.

If I’m married in community of property, can I still get business finance? Yes, but a lender may require your spouse’s written consent as a condition of the facility, which can add time and an additional party to the approval process.

Does an accrual system still avoid these consent requirements? Yes. Both accrual and non-accrual regimes under an ante-nuptial contract are marriages out of community of property, so the surety consent requirement in section 15 doesn’t apply to either.

Can an ante-nuptial contract affect a suretyship I’ve already signed? No. An ante-nuptial contract only applies to a marriage entered into after it’s registered, so existing suretyships remain governed by whatever regime applied when they were signed.

Structuring for What Comes Next

The marital regime you choose does more than define what happens if a marriage ends. It shapes how easily you can borrow, structure, and eventually pass on the business you’re building, right from the outset.

Kontak OAK Regte to discuss an ante-nuptial contract structured around your business’s borrowing and growth plans.