Difference between Co-ownership and Partnership


Co-ownership vs Partnership

Co-ownership vs Partnership have different meanings. In partnership, there is an association of two or more persons who carry on common business for earning profit. They share its profits and losses as per oral or verbal agreement.

Co-ownership refers to joint ownership in a property by more than one person. If two or more-person X Y and Z purchase a property collectively without any business motive, it will be a case of co-ownership. co ownership thus has joint ownership but business is not combined with it.

Co-ownership vs Partnership
Co-ownership vs Partnership

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The main points of distinction between partnership and co-ownership are as follow

Co-ownership vs Partnership

Basic of Difference



ContractPartnership always arises out of contractCo-ownership may or may not be based on agreement. it can also arise by operation of law. Such as by inheritance. on the death of father, sons and daughters become co-owners of property
Number of partnersThe limit for maximum number of partners is 20 in a firm and 10 for bankingThere is no ceiling on the maximum limit of co-owners.
Agency relationshipA partner is an agent of the other partners. He can bind them for his acts in the ordinary course of businessA co-owner is not the agent of the other co-owner. Every co-owner is responsible for his own deeds only
Sharing of profit and lossA partnership is always entered into for business. It involves haring f profits and lossesA co-ownership does not involve sharing of profits and losses
Right of investmentIf a partner spends money for the business, he can demand its repaymentIf a co-owner can transfer his right and interest without the consent of the other co-owners.
Transfer of interestA partner cannot transfer his right and interest to any person without consulting his partners.A co-owner can transfer his right and interest without the consent of the other co-owners.
Right of divisionNo partner can seek division of the partnership property in parts his only right is to have a share of the profits or demand the payment of his share in cashA co-owner has a tight to demand the division of property in parts
MinorA minor cannot enter into a contract and as such is not able to become a regular partner of a firmA minor can be the co-owner of a property
RegulationsPartnership business is regulated by the partnership Act of 1932 as adopted in Pakistan & IndiaThere is no separate law to regulate co ownership
DissolutionPartnership can be dissolved on the insolvency, death misconduct etc or a partnerA co-ownership cannot be dissolved on any such grounds