Partnership vs. Corporations vs. Co-ownership 1. Contract Partnership always arises out of contract.

Co-ownership may or may not be based on agreement. It can also arise by operation of law, such as by inheritance. On -the death of father, sans and daughters become co-owners of property. 2. Number of Partners The limit for maximum number of partners is 20 in a firm and 10 for banking. There is no ceiling on the maximum limit of co owners. 3. Agency Relationship A partner is an agent of the other partners. He can bind them for his acts in the ordinary course of business A co-owner is not the agent of the other co owner/co-owners; every co-owner is responsible for his own deeds only. 4. Sharing of Profits and Losses A partnership is always entered into for business, it involve sharing of profits and losses. A co-ownership does not involve sharing of profits and losses. 5. Transfer of Interest A partner cannot transfer his right and interest to any person without consulting his partners. A co-owner can transfer his right and interest without the consent of the other co-owners. 6. Right of Investment If a partner spends money far the business, he can demand its repayment. If a co-owner spends money for the improvement of the property, he has no legal claim (lien) for its refund. 7. Right of Division No partner can seek division of the partnership property in specie (in parts). His only right is to have a share of the profits or demand the payment of his share in cash. A co-owner has a right to demand the division of property n specie or parts. 8. Minor A minor cannot enter into a contract and as such is not able to become a regular partner of a firm. A minor can be the co owner of a property. 9. Regulations Partnership business is regulated by the Partnership Act of 1932 as adopted in Pakistan. There is no separate law to regulate co-ownership. 10. Dissolution Partnership can be dissolved on the insolvency, death, misconduct etc of a partner. A co-ownership can not be dissolved on any such grounds. 1. Creation CORPORATION Created by operation of law; PARTNERSHIP Created by agreement of the parties; 2. Numbers of incorporators CORPORATION Requires at least 5 incorporators; PARTNERSHIP Requires at least 2 partners; 3. Commencement of juridical personality CORPORATION Acquires juridical personality from the date of issuance of the certificate of incorporation by the Securities and Exchange Commission ;PARTNERSHIP Acquires juridical personality form the moment of execution of the contract of partnership 4. Powers Corporation can exercise only the powers expressly granted by law or implied from those granted or incident to its existence ; Partnership may exercise any power authorized by the partners (provided it is not contrary to law, morals, good customs, public order, public policy) 5. Management CORPORATION The power to do the business and manage its affairs is vested in the board of directors and trustees ;PARTNERSHIP When management is not agreed upon, every partner is an agent of the partnership 6. Effect of mismanagement

CORPORATION The suit against a member of the board of directors or trustees who mismanages must be in the name of the corporation; PARTNERSHIP A partner as such can sue a co-partner who mismanages 7. Right of succession CORPORATION Has right of succession PARTNERSHIP Has nor right of succession 8. Extent of liability to third persons CORPORATION Stockholders are liable only to the extent of the shares subscribed by them; PARTNERSHIP Partners are liable personally and subsidiarily (sometimes solidarily) for partnership debts to third persons 9. Transferability of interests CORPORATION Stockholder has generally the right to transfer his shares without prior consent of the other stockholders because a corporation is not based on this principle; PARTNERSHIP Partner cannot transfer his interest in the partnership so as to make the transferee a partner without the unanimous consent of all existing partners because the partnership is based on the principle of delectus personarum 10. Term of existence CORPORATION May not be formed for a term in excess of 50 years extendible to no more than 50 years in any one instance; PARTNERSHIP May be established for any period of time stipulated by the partners 11. Firm name CORPORATION May adopt any name provided it is not the same as or similar to any registered firm name; PARTNERSHIP Limited partnership is required by law to add the word Ltd to its name 12. Dissolution CORPORATION Can only be dissolved with the consent of the State; PARTNERSHIP May be dissolved at any time by or all of the partners 13. Governing Law CORPORATION Governed by the Corporation Code; PARTNERSHIP Governed by the Civil Code