Co-ownership vs.
Partnership
1.
As to creation: Co-ownership may be created by law, contract,
succession, fortuitous event, or occupancy; whereas, partnership is always
created by contract.
2.
As to purpose: The purpose of co-ownership is the common enjoyment of
the thing or right owned in common; whereas, the purpose of partnership is to
obtain profits.
3.
As to personality: Co-ownership has
no juridical personality which is separate and distinct from that of the
co-owners; whereas, a partnership has.
4.
As to duration: Whereas an agreement not to divide the community
property for more than 10 years is not allowed by law, such an agreement would
be perfectly valid in the case of partnerships. This is so, because under the
law, there is no limitation upon the duration of partnerships.
5.
As to power of members: Whereas a co-owner has no power to represent the
co-ownership, unless there is an agreement to
that effect, a partner has the power to represent the partnership, unless there
is a stipulation to the contrary.
6. As to effect of disposition of shares: If a
co-owner transfers his share to a third person, the latter becomes
automatically a co-owner, but if a partner transfers his share to a third
person, the latter does not become a partner, unless agreed upon by all the
partners.
7. As to division of profits: Whereas in co-ownership
the division of the benefits and charges is fixed by law, in a partnership, the
division of profits and losses may be subject to the agreement of partners.
8. As to effect of death: Whereas the death of a
co-owner has no effect upon the existence of co-ownership, the death of a
partner shall result in the dissolution of partnership.
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