What is the difference between Partnership and Co-ownership?



Co-ownership means joint ownership of some property which does not necessarily result in partnership. In partnership, the partners are necessarily co-owners of the proper the firm, but in co-ownership the co-owners are not necessarily partners. The enterprise may also go for business of co-ownership.

The major difference between a partnership a co-ownership may be noted:

1. Mode of creation:

Partnership necessarily arises from contract. But co-ownership may arise from contract or from the operation of law or from status.


Partnership exists for carrying on some business and to share the profits c: such business- Co-ownership may not lead to business activities for the purpose of profit.

Nature of interest:

Partnership involves community of interest, whereas co-ownership cay not necessarily involve any such interest.

Transfer of shares:

A partner cannot transfer his shares to an outsider without the consent of all the other partners. A co-owner can do so.

Number of members:

In partnership, the maximum number of members cannot exceed 10 in banking business and 20 in any other type of business, whereas there is no maximum limit of members in case of co-ownership.

Agency relationship:

A partner acts as an agent and can bind the firm for his acts in the ordinary course of business. A co-owner is not an agent of the other co-owners.

Partition of joint property:

A partner has no right to demand partition of joint property in specific but he can sue his co-partners for dissolution of the firm and accounts. A c 3-owner is entitled to sue for the partition of the joint property.

Lien for expenses:

A partner has a lien on the partnership property for the expenses incurred by him on such property on behalf of the firm. A co-owner has no such lien for expenses incurred or payment of a common debt.

Regulating law:

Partnership is governed by the Indian Partnership Act, 1932 but there is no statute law to govern co-ownership.