Partnership and Co-Ownership Distinction

10 Differences between CO-OWNERSHIP VS PARTNERSHIP


  • It is generally arisen by the operation of law or status. Agreement is not essential for the formation of co-ownership.
  • It must be created by the agreement or contract. No contract no Partnership. Agreement may be expressed or implied.

Sharing of Profits 

  • There is no concept of community sharing of profit or loss in co-ownership.
  • Sharing of profits is the basis object of the formation of the partnership.


  • Under this form of organization "business" may or may not be conducted.
  • Various kind of partners are united to carry on any type of "business"
Reading: Considerable things before starting business


  • As one co-owner is not an agent of another co-owner, he cannot bind another by his act.
  • On partner is an agent of another partner and he can bind all persons by this act.

Transferring Right

  • A co-owner an transfer his share, right and interest to other person without the consent of the existing co-owner.
  • A partner cannot transfer his share or right to a stranger without the consent of other partner.

Maximum Limit 

  • There is no restriction for the maximum number of co- owner in the co-ownership business.
  • There is restriction for minor to become a regular partner according to partnership Act. 1992.


  • A Minor can become regular co- owner in the co-ownership business.
  • There is restriction for the maximum number of partnership firm (i.e. not more than 20 in ordinary business and 10 in banking business)

Division of Property 

  • A co-owner can demand division of property for his own interest.
  • A partner has no right to partition of property but he can demand share of profit out of the properties.

Lien Position 

  • A co-owner not being an agent of an other co-owner so he has no lien on the co-ownership property.
  • As one partner is an agent of another partner, he has lien on the business property.

Reading: Classes of Contract

Right of Dissolution 

  • The business of the co-ownership cannot be dissolved by the death or retirement of any co-owner.
  • The life of the partnership is affected by the death, retirement or insolvency of any partner.
Partnership and Co-Ownership Distinction Partnership and Co-Ownership Distinction Reviewed by Janet D'Suza on 5:58:00 PM Rating: 5

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