In the co-ownership property is owned jointly without any intention to carry on business.
Example : Two or more persons purchase a car without any idea of giving it on hire, it is co-ownership.
It is the relation between persons who have agreed to share the profit of a business.
Example :- Two or more persons purchase a Bus with the intention of giving it on hire and distributing its income among the partners, is the case of partnership.
Difference or Distinction Between Co-ownership and Partnership
1. Profit Sharing :-
Partnership : In the partnership profit sharing the basic object of the partnership formation.
Co-Ownership : In the Co-ownership there is no concept of profit and loss sharing.
2. Creation :-
Partnership : Agreement or contract is essential for partnership.
Co-Ownership : Agreement is not essential for co-ownership.
3. Agent :-
Partnership : Every partner is an agent of other partner in the partnership.
Co-Ownership : One co-owner is not the agent of other co-owner.
4. Limit for Members :-
Partnership : In the partnership there is restriction for the maximum number of partners.
Co-Ownership : In the co-ownership there is no restriction for the maximum number of co-owners.
5. Transfer of Rights :-
Partnership : In the partnership a partner cannot transfer his rights to another person without consulting the other partners.
Co-Ownership : In a co-ownership a co-owner can transfer his rights to any one without consultation.
6. Legal Claim :-
Partnership : In a partnership a partner has legal claim on the property of partnership.
Co-Ownership : In a co-ownership a co-owner has a legal claim on the joint property.
7. Division of Property :-
Partnership : In a partnership a partner has no right to demand the partition of property. He can only demand the share of profit.
Co-Ownership : In a co-ownership a co-owner can demand the division of property.
8. Dissolution Risk :-
Partnership : Partnership is affected by the death, insolvency or retirement of any partner.
Co-Ownership : Co-ownership can not be dissolved due to above reasons.
9. Minor Case :-
Partnership : In a partnership a minor can not become a regular partner.
Co-Ownership : In a co-ownership a minor can become a regular co-owner.