DISTINCTION BETWEEN FIRM AND CO-OWNERSHIP
Co-ownership is not a partnership. But the law does not prevent the co-owners to become partners.
- Creation
Partnership is created by the contract between the persons called partners.
Co-ownership may be created by contract or by the operation of law. Partnership is never
created by the operation of law. - Business
For a firm, business is a must.
For co-ownership, it is not must. - Mutual agency
For a firm, mutual agency is a must. The act of one partner binds all other partners.
But, in case of co-ownership, mutual agency is not a must. The person cannot bind the co-owner beyond the extent of his share. - Transfer of interest
In a firm, a partner cannot transfer his interest without the consent of all other partners.
In co-ownership, one owner can transfer his interest without the consent of other co-owners. - Creation
Partnership is created by the contract between the persons called partners.
Co-ownership may be created by contract or by the operation of law. Partnership is never
created by the operation of law. - Business
For a firm, business is a must.
For co-ownership, it is not must. - Mutual agency
For a firm, mutual agency is a must. The act of one partner binds all other partners.
But, in case of co-ownership, mutual agency is not a must. The person cannot bind the co-owner beyond the extent of his share. - Transfer of interest
In a firm, a partner cannot transfer his interest without the consent of all other partners.
In co-ownership, one owner can transfer his interest without the consent of other co-owners.