diff --git a/app/models/enterprise.rb b/app/models/enterprise.rb
index a146fc4cc4..ccca96ab26 100644
--- a/app/models/enterprise.rb
+++ b/app/models/enterprise.rb
@@ -16,7 +16,7 @@ class Enterprise < ActiveRecord::Base
   has_many :enterprise_fees
   has_many :enterprise_roles, :dependent => :destroy
   has_many :users, through: :enterprise_roles
-  belongs_to :owner, class_name: 'Spree::User', foreign_key: :owner_id
+  belongs_to :owner, class_name: 'Spree::User', foreign_key: :owner_id, inverse_of: :owned_enterprises
   has_and_belongs_to_many :payment_methods, join_table: 'distributors_payment_methods', class_name: 'Spree::PaymentMethod', foreign_key: 'distributor_id'
   has_many :distributor_shipping_methods, foreign_key: :distributor_id
   has_many :shipping_methods, through: :distributor_shipping_methods
@@ -47,7 +47,8 @@ class Enterprise < ActiveRecord::Base
   validates :name, presence: true
   validates :type, presence: true, inclusion: {in: TYPES}
   validates :address, presence: true, associated: true
-  validates :owner, presence: true
+  validates_presence_of :owner
+  validate :enforce_ownership_limit, if: lambda { owner_id_changed? }
 
   before_validation :ensure_owner_is_manager, if: lambda { owner_id_changed? }
   before_validation :set_unused_address_fields
@@ -241,4 +242,10 @@ class Enterprise < ActiveRecord::Base
   def ensure_owner_is_manager
     users << owner unless users.include?(owner) || owner.admin?
   end
+
+  def enforce_ownership_limit
+    unless owner.can_own_more_enterprises?
+      errors.add(:owner, "^You are not permitted to own own any more enterprises (limit is #{owner.enterprise_limit}).")
+    end
+  end
 end
diff --git a/app/models/spree/user_decorator.rb b/app/models/spree/user_decorator.rb
index 9890d0ff7b..2a177f84a0 100644
--- a/app/models/spree/user_decorator.rb
+++ b/app/models/spree/user_decorator.rb
@@ -1,7 +1,7 @@
 Spree.user_class.class_eval do
   has_many :enterprise_roles, :dependent => :destroy
   has_many :enterprises, through: :enterprise_roles
-  has_many :owned_enterprises, class_name: 'Enterprise', foreign_key: :owner_id
+  has_many :owned_enterprises, class_name: 'Enterprise', foreign_key: :owner_id, inverse_of: :owner
   has_one :cart
 
   accepts_nested_attributes_for :enterprise_roles, :allow_destroy => true
@@ -9,7 +9,7 @@ Spree.user_class.class_eval do
   attr_accessible :enterprise_ids, :enterprise_roles_attributes
   after_create :send_signup_confirmation
 
-  validate :owned_enterprises_count
+  validate :limit_owned_enterprises
 
   def build_enterprise_roles
     Enterprise.all.each do |enterprise|
@@ -23,11 +23,15 @@ Spree.user_class.class_eval do
     Spree::UserMailer.signup_confirmation(self).deliver
   end
 
+  def can_own_more_enterprises?
+    owned_enterprises(:reload).size < enterprise_limit
+  end
+
   private
 
-  def owned_enterprises_count
+  def limit_owned_enterprises
     if owned_enterprises.size > enterprise_limit
-      errors.add(:owned_enterprises, "^The nominated user is not permitted to own own any more enterprises.")
+      errors.add(:owned_enterprises, "^The nominated user is not permitted to own own any more enterprises (limit is #{enterprise_limit}).")
     end
   end
 end
diff --git a/spec/features/admin/enterprises_spec.rb b/spec/features/admin/enterprises_spec.rb
index ee67dc1a73..249528149d 100644
--- a/spec/features/admin/enterprises_spec.rb
+++ b/spec/features/admin/enterprises_spec.rb
@@ -257,13 +257,13 @@ feature %q{
     let(:supplier2) { create(:supplier_enterprise, name: 'Another Supplier') }
     let(:distributor1) { create(:distributor_enterprise, name: 'First Distributor') }
     let(:distributor2) { create(:distributor_enterprise, name: 'Another Distributor') }
+    let(:enterprise_user) { create_enterprise_user }
 
     before(:each) do
-      @new_user = create_enterprise_user
-      @new_user.enterprise_roles.build(enterprise: supplier1).save
-      @new_user.enterprise_roles.build(enterprise: distributor1).save
+      enterprise_user.enterprise_roles.build(enterprise: supplier1).save
+      enterprise_user.enterprise_roles.build(enterprise: distributor1).save
 
-      login_to_admin_as @new_user
+      login_to_admin_as enterprise_user
     end
 
     scenario "can view enterprises I have permission to" do
@@ -290,23 +290,42 @@ feature %q{
       expect(page).to_not have_content "distributor2.name"
     end
 
-    scenario "creating an enterprise" do
-      # When I create an enterprise
-      click_link 'Enterprises'
-      click_link 'New Enterprise'
-      fill_in 'enterprise_name', with: 'zzz'
-      fill_in 'enterprise_address_attributes_address1', with: 'z'
-      fill_in 'enterprise_address_attributes_city', with: 'z'
-      fill_in 'enterprise_address_attributes_zipcode', with: 'z'
-      click_button 'Create'
+    context "creating an enterprise" do
+      before do
+        # When I create an enterprise
+        click_link 'Enterprises'
+        click_link 'New Enterprise'
+        fill_in 'enterprise_name', with: 'zzz'
+        fill_in 'enterprise_address_attributes_address1', with: 'z'
+        fill_in 'enterprise_address_attributes_city', with: 'z'
+        fill_in 'enterprise_address_attributes_zipcode', with: 'z'
+      end
 
-      # Then it should be created
-      page.should have_content 'Enterprise "zzz" has been successfully created!'
-      enterprise = Enterprise.last
-      enterprise.name.should == 'zzz'
+      scenario "without violating rules" do
+        click_button 'Create'
 
-      # And I should be managing it
-      Enterprise.managed_by(@new_user).should include enterprise
+        # Then it should be created
+        page.should have_content 'Enterprise "zzz" has been successfully created!'
+        enterprise = Enterprise.last
+        enterprise.name.should == 'zzz'
+
+        # And I should be managing it
+        Enterprise.managed_by(enterprise_user).should include enterprise
+      end
+
+      context "overstepping my owned enterprises limit" do
+        before do
+          create(:enterprise, owner: enterprise_user)
+        end
+
+        it "shows me an error message" do
+          click_button 'Create'
+
+          # Then it should show me an error
+          expect(page).to_not have_content 'Enterprise "zzz" has been successfully created!'
+          expect(page).to have_content "You are not permitted to own own any more enterprises (limit is 1)."
+        end
+      end
     end
 
     scenario "editing enterprises I have permission to" do
diff --git a/spec/models/enterprise_spec.rb b/spec/models/enterprise_spec.rb
index c6418def09..f6b3c13d2d 100644
--- a/spec/models/enterprise_spec.rb
+++ b/spec/models/enterprise_spec.rb
@@ -1,6 +1,7 @@
 require 'spec_helper'
 
 describe Enterprise do
+  include AuthenticationWorkflow
 
   describe "associations" do
     it { should belong_to(:owner) }
@@ -54,9 +55,9 @@ describe Enterprise do
     end
 
     describe "ownership" do
-      let(:u1) { create(:user) }
-      let(:u2) { create(:user) }
-      let(:e) { create(:enterprise, owner: u1 ) }
+      let(:u1) { create_enterprise_user }
+      let(:u2) { create_enterprise_user }
+      let!(:e) { create(:enterprise, owner: u1 ) }
 
       it "adds new owner to list of managers" do
         expect(e.owner).to eq u1
@@ -68,6 +69,16 @@ describe Enterprise do
         expect(e.owner).to eq u2
         expect(e.users).to include u1, u2
       end
+
+      it "validates ownership limit" do
+        expect(u1.enterprise_limit).to be 1
+        expect(u1.owned_enterprises(:reload)).to eq [e]
+        e2 = create(:enterprise, owner: u2 )
+        expect{
+          e2.owner = u1
+          e2.save!
+        }.to raise_error ActiveRecord::RecordInvalid, "Validation failed: You are not permitted to own own any more enterprises (limit is 1)."
+      end
     end
   end
 
diff --git a/spec/models/spree/user_spec.rb b/spec/models/spree/user_spec.rb
index e985d9bde8..f049c64b2f 100644
--- a/spec/models/spree/user_spec.rb
+++ b/spec/models/spree/user_spec.rb
@@ -3,23 +3,23 @@ describe Spree.user_class do
     it { should have_many(:owned_enterprises) }
 
     describe "enterprise ownership" do
-      let(:u1) { create(:user) }
-      let(:u2) { create(:user) }
-      let(:e1) { create(:enterprise, owner: u1) }
-      let(:e2) { create(:enterprise, owner: u1) }
+      let(:u1) { create(:user, enterprise_limit: 2) }
+      let(:u2) { create(:user, enterprise_limit: 1) }
+      let!(:e1) { create(:enterprise, owner: u1) }
+      let!(:e2) { create(:enterprise, owner: u1) }
 
-      it "provides access to owned enteprises" do
-        expect(u1.owned_enterprises).to include e1, e2
+      it "provides access to owned enterprises" do
+        expect(u1.owned_enterprises(:reload)).to include e1, e2
       end
 
       it "enforces the limit on the number of enterprise owned" do
-        expect(u2.owned_enterprises).to eq []
+        expect(u2.owned_enterprises(:reload)).to eq []
         u2.owned_enterprises << e1
-        u2.owned_enterprises << e2
+        expect(u2.save!).to_not raise_error
         expect {
+          u2.owned_enterprises << e2
           u2.save!
-        }.to raise_error ActiveRecord::RecordInvalid, "Validation failed: The nominated user is not permitted to own own any more enterprises."
-
+        }.to raise_error ActiveRecord::RecordInvalid, "Validation failed: The nominated user is not permitted to own own any more enterprises (limit is 1)."
       end
     end
   end
diff --git a/spec/support/request/authentication_workflow.rb b/spec/support/request/authentication_workflow.rb
index 49b1512cac..a2ee597f27 100644
--- a/spec/support/request/authentication_workflow.rb
+++ b/spec/support/request/authentication_workflow.rb
@@ -38,7 +38,7 @@ module AuthenticationWorkflow
   end
 
   def create_enterprise_user(enterprises = [])
-    new_user = create(:user, email: 'enterprise@hub.com', password: 'blahblah', :password_confirmation => 'blahblah', )
+    new_user = create(:user, password: 'blahblah', :password_confirmation => 'blahblah')
     new_user.spree_roles = [] # for some reason unbeknown to me, this new user gets admin permissions by default.
     for enterprise in enterprises do
       new_user.enterprise_roles.build(enterprise: enterprise).save