Business Law-II

SYBCOM
 Unit 1
Chapter 1-Company and its Formation
Meaning of Company
The Companies Act 2013 is an Act of the Parliament of India on
Indian company law which regulates incorporation of a company,
responsibilities of a company, directors, dissolution of a company.
Definition of Company
Section 2(20) of the companies Act,2013 defines a company as, "Company
means a company incorporated under this Act or under any previous
company Law
Features of Company
• Registration-date of incorporation, name of all member(body
corporate) (Expt- HUF, Partnership)
• Independent corporate Existence-separate legal entity-
Company and person is different (salomom vs. salomon & Co)
partnership has no legal existence
• Salomon v A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22 is a landmark UK
company law case.
FACTS: Salomon transferred his business of boot making, initially run as a sole
proprietorship, to a company (Salomon Ltd.), incorporated with members
comprising of himself and his family. The price for such transfer was paid to
Salomon by way of shares,
Cont..
• and debentures having a floating charge (security against debt) on the assets of the
company. Later, when the company's business failed and it went into liquidation, Salomon's
right of recovery (secured through floating charge) against the debentures stood aprior to
the claims of unsecured creditors, who would, thus, have recovered nothing from the
liquidation proceeds. The liquidator sought to overlook the separate personality of Salomon
Ltd., distinct from its member Salomon, so as to make Salomon personally liable for the
company's debt as if he continued to conduct the business as a sole trader.
• ISSUE: Whether, regardless of the separate legal identity of a company, a
shareholder/controller could be held liable for its debt, over and above the capital
contribution, so as to expose such member to unlimited personal liability?

JUDGMENT: A company is a separate legal entity distinct from its members and so
insulating Mr. Salomon, the founder of A. Salomon and Company, Ltd., from personal liability
to the creditors of the company he founded. The court also upheld firmly the doctrine of
corporate personality, as set out in the Companies Act 1862, so that creditors of an insolvent
company could not sue the company's shareholders to pay up outstanding debts.
Cont…
• Perpetual succession- PS means that the member of a company may
keep changing form time to time but that does not affect the company
continuity.
• Separate property- The property is vested in the company as a body
Corporate and no changes of individual membership affect the title of the
company. The assets of a company are not allowed to be used for the
payment of shareholders debts
• Transferable shares- Under section 44- should be transferable Under
section 45- distinguished by it number, under section 46-certificate with
common seal.
Cont…
• Capacity to sue and be sued-A company being a body corporate can sue
and can be sued to the company
• Limited Liability- The member do not undertake the liabilities for
company debts.
Sec.2(21) Company Limited by Guarantee
Sec.2(22) Company Limited by shares
Sec. 2(63) one person company
Cont..
• Common seal- Company has a separate legal existence under its own
common seal.
• Capacity to contract in its own name

Natural limitation- Directors are the agent of the company

Directors enter into contract on behalf of the company under the common
seal of the company
Legal limitation-Company can not enter into any contract which
goes beyond its two main documents viz MOA,AOA
Advantages of a Body Corporate
• Perpetual Succession-Individual members may come and go but the
corporate body continues. Even if name changes the company continues.
• Limited Liability-A member is not burdened with liability in respect of
debts or liabilities that might have been incurred by others in the
business.
• Diversion of ownership and control- The body corporate have authority
to appoint a small body which will look after day to day operations of the
company.
Cont…
• Routine affairs with a small body- The day to day affairs are looked
after by a body consisting of few person(2-15 member) it may be called as
Board of Directors
• Rules of Business- A corporate body must have rules for conduct of
business. Such rules may be called as constitution, Regulation or MOA,
AOA.
Salient Feature of Company Form of Organization
• Memorandum of Association- MOA is a really the basic constitution of
the company and is its foundation
• Articles of Association- AOA prescribe rules regarding internal
management of the company. It contain the authorities and
responsibilities of member ,directors, MD, Managers.
Cont..
• Body of Members- BOM are the shareholder, they are the real owner of
the company. They have the following power
Adopt the report of Board of Directors
Adopt report of auditors
Elect directors
Appoint auditors and fix their remuneration
Declare dividend

• Board of Directors- They supervise and regulate the activities of the

company
Cont….
• Managing Director/Managers/Wholetime Director/CEO- Person work
under overall supervision and control of Board of Directors. Such person
are termed as KEY Managerial Personnel (KMP)
Disadvantages of the Company Form of
Organization
• High cost of formation

• High cost of running the organization

• Winding up of the company

Lifting or Piercing the corporate VEIL
• Protection of Revenue

• Prevention of Fraud or Improper conduct

• Determination of Character of a company

• Where the company is a sham

• Company avoiding legal obligation

• Company acting as agent or trustee of the shareholders

• Protecting public policy

Classification of companies
• Companies limited by shares Section 2(22)- It means company having
the liability of its members limited by the memorandum to the amount, if
any , unpaid on the shares respectively held by them.
• Companies limited by Guarantee Section 2(21)- It means a company
having the liability of its members limited by the memorandum to such
amount as the members may respectively undertake to contribute to the
assets of the company in the event of its being wound up
• Unlimited companies Section 3(1)- A company may be formed for any
lawful purpose by Public company, Private company, one Person company
What Is a Private Company?
• Section 2(68) of Companies Act, 2013 defines private companies.
According to that, private companies are those companies whose
articles of association restrict the transferability of shares and prevent the
public at large from subscribing to them. ... Private companies can now
have a minimum paid-up capital of any amount.
What Is a Public Company?
• Section 2(71) A public company is a company that has permission to
issue registered securities to the general public through an
initial public offering (IPO) and it is traded on at least one stock exchange
market.
• Features: Public limited company

• Minimum capital: 5,00,000

• Invitation to public: Yes

• Minimum directors: 3
what is holding company?
• Section 2(46) of the Companies Act, 2013 defines Holding Company.
The company is said to be the holding company if that
particular company holds/owns at least 50% of the
other companies and has the authority to make management decisions,
influences and controls the company's board of directors.
what is one person company?
• Section 2(62) of Companies Act defines a one-person company as
a company that has only one person as to its member. Furthermore,
members of a company are nothing but subscribers to its memorandum
of association, or its shareholders. So, an OPC is effectively
a company that has only one shareholder as its member.
•
what is subsidiary company?
• Section 2(87)The subsidiary company is the company that is
controlled by the holding or parent company. It is defined as
a company/body corporate where the holding company controls the
composition of the Board of Directors
what is small company?
• Section 2(85)A small company is a private company whose capital does
not exceed 50 lakhs or such higher amount as prescribed which shall not
be more than 10 crores and turnover does not exceed 2 crores or such
higher amount as may be prescribed which shall not be more than 100
crores while a Private company includes a Small Company ..
What is the Body Corporate?
• Body corporate broadly means a corporate entity which has
a legal existence. The term "body corporate" is defined in Section 2(11)
of the Companies Act, 2013. This includes a private company,
public company, one personal company, small company, Limited
Liability Partnerships, foreign company etc.
What is a Foreign Company?
• As per Section 2(42) of Companies Act 2013 “foreign company” means
any company or. body corporate incorporated outside India which- a)
has a place of business in India whether by itself or through an agent
,physically. or through electronic mode ; and. b) conducts any business
activity in India in any other manner .
What is Government Company?
• A “Government company” is defined under Section 2(45) of
the Companies Act, 2013 as “any company in which not less than 51% of
the paid-up share capital is held by the Central Government, or by any
State Government or Governments, or partly by the
Central Government and partly by one or more State Governments, and
...
Incorporation of Company
Formation of Company Section 3(1): A company may be formed for any
lawful purpose
 7 or more person, where the company to be formed is to be public
company
 2 or more person, where the company to be formed is to be a private
company
 1 person, where the company to be formed is to be one person company
that is to say a private company
Section 7- Procedure for Registration of Company
• The memorandum and articles of the company

• A declaration

• An affidavit

• The address for correspondence

• The particulars of name

• The particulars of the First directors

• The particulars of the interests of the persons mentioned in the articles as

the first directors.
Effects of Registration-------Stop
• Certificate of Incorporation does not mean all objects are legal

• Certificate of Incorporation is not conclusive evidence

• There is no parallel provision in the 2013 Act

• Corporate identity Number

• Procedure after registration of a company

 Promoter
• Section 2(69)“promoter” means a person—

• (a) who has been named as such in a prospectus or is identified by the

company in the annual return referred to in section 92; or
• (b) who has control over the affairs of the company, directly or indirectly
whether as a shareholder, director or otherwise; or
• (c) in accordance with whose advice, directions or instructions the Board
of Directors of the company is accustomed to act:
Duties and liabilities of the Promoter
• He stand in a fiduciary position towards the company

• Duty of promoter as regards prospectus

• Liability to third parties

Remuneration of Promoter-done
• He may sell his own property at a profit to the company provided be
makes a disclosure to the effect
• He may be given an option to buy certain number of shares in the
company at par
• He may take a commission on the shares sold

• He may be paid a lump sum by the company

Electronic filling of documents
 Section 398: Provision relating to filing of applications documents,
inspection, etc. in electronic form.
 Section 399 Inspection , production and evidence of documents kept by
Registrar
 Section 403: Fee for Filing etc.

 Section 404: Fees, etc. to be credited into Public Account.

 Thank You
End of Chapter 1
Chapter 2- Types of Companies
1. Private Company
2. Public Company
3. one person company
4. holding company
5. subsidiary company
6. small company
7. Body Corporate
8. Foreign Company
9. Government Company
Exemptions and Privileges available to Private
Company
1. Minimum number of member section 3(1)(b)(2 members)

2. Exemption form presentation cash flow statement if private company is

a small company 2(40)
3. Private company can avail exemptions applicable to a small company if it
satisfies the conditions stipulated be section 2(85)Minimum paid-up
share capital (section 2(68)
4. Minimum paid-up share capital section 2(68)

5. Right to alter articles section 14(1)(a)

Cont..
Allotment of Shares
6. No requirement of Minimum subscription section 39(1)
7. No requirements of minimum application money on securities
section 39(2)
Share capital
8. Issue of sweat equity shares need not comply with SEBI regulation
section 54(1)(d)
9. No need for NOC from SEBI for reductionj of capital section66(2)
Cont..
10. Not barred form giving financial assistance to purchase its
shares\shares of its holding company section67(2)
11.No need to file declaration of solvency for buy-back shares with SEBI
Section 68(6)
12. No need to file return of buy-back with SEBI section 68(10)
Meeting
13. Quorum for general meeting-minimum 2 members personally present
section 103
14. Not required to file report on AGM with ROC section 121
Restrictions relating to a private company
1. Restriction on transfer of shares section 2(68)
2. Cannot invite public to subscribe for its securities section 2(68)
3. Maximum number of members 200 section 2(68)
4. Memorandum must conform to applicable model form in Schedule
5. Alteration of articles to incorporate entrenchment provision requires
agreement of all members of the company section 4(6)
6. Cannot make public offer of securities section 23
7. Issue of GDEs not allowed section 41
8. No access to public deposits section 72\76
What is public company
• Section 2(71) A public company is a company that has permission to
issue registered securities to the general public through an
initial public offering (IPO) and it is traded on at least one stock exchange
market.
• Features: Public limited company

• Minimum capital: 5,00,000

• Invitation to public: Yes

• Minimum directors: 3
Distinction between private and public company
BASIS FOR COMPARISON PUBLIC COMPANY PRIVATE COMPANY
Meaning A public company is a company A private company is a company
which is owned and traded which is owned and traded
publicly privately.
Minimum members 7 2
Maximum members Unlimited 200
Minimum Directors 3 2
Suffix Limited Private Limited
Start of business After receiving certificate of After receiving certificate of
incorporation and certificate of incorporation.
commencement of business.
Statutory Meeting Compulsory Optional
Cont…
Issue of prospectus / Obligatory Not required
Statement in lieu of
prospectus
Public subscription Allowed Not allowed
Quorum at AGM 5 members must present in 2 members must present in
person. person.
Transfer of shares Free Restricted
When does a private company become a public
company
• The private limited company form of organization is preferred by
businessmen because of the special privileges it enjoys. Capital is sourced
from close friends, relatives and known persons and not from the public.
Therefore, the Companies Act, 1956 does not impose stringent rules and
regulations as those imposed on Public limited companies. In certain
circumstances, a private limited would become a public company.
• 1. Conversion by default

• 2. Conversion by Choice
1. Conversion by default
• A private company:

• restricts the right to transfer shares,

• limits the maximum number of members to 200

• prohibits invitation to the public for subscription of shares or debentures.

• If any of these conditions are violated, a private company would become a

public Company by default.
2. Conversion by Choice
• Any private company which desires to get converted into a public
company should make the necessary changes in the Articles and follow
the below mentioned steps:
• It should convene a general meeting and pass a special resolution duly
altering the Articles.
• The copy of the resolution along with the amended Articles should be filed
with the Registrar within 30 days of passing the special resolution.
• The number of members should be increased to 7.

• The company has to apply to the Registrar for obtaining a fresh certificate
of incorporation with the words ‘Private’ deleted from its name.
Conversion of a public company into a private
company
A public company may be converted into a
private company by passing a special Resolution
to that effect and confirmation by the central
Govt.
what is one person company?
• Section 2(62) of Companies Act defines a one-person company as
a company that has only one person as to its member. Furthermore,
members of a company are nothing but subscribers to its memorandum
of association, or its shareholders. So, an OPC is effectively
a company that has only one shareholder as its member.
Types of OPC-Section 3(2)
1. A company limited by shares

2. A company limited by guarantee

3. An unlimited company
Memorandum of Association- section 4(1)
1. Name of the company

2. Registered office

3. Objects

4. Liability of members- limited or unlimited

5. Share capital

6. Number of shares- not be less than one share

7. Number of shares each subscriber to the memorandum intends to takes

Types of OPC
1. One person limited by shares

2. OPC limited by guarantee and having share capital

3. OPC limited by guarantee and having no shares capital

4. OPC unlimited having share capital

5. OPC unlimited not having share capital

Foreign Company
• As per Section 2(42) of Companies Act 2013 “foreign company” means
any company or. body corporate incorporated outside India which- a)
has a place of business in India whether by itself or through an agent
,physically. or through electronic mode ; and. b) conducts any business
activity in India in any other manner .
Government Company
Dormant Companies
Producer Companies
Statutory Companies
 Chapter 3
MOA & AOA
Chapter 4-Prospectus
Rights of Members
1. To elect directors
2. To vote on resolution
3. To enjoy profits
4. To apply to the court oppression
5. To apply to the court for mismanagement
6. To apply to the court in case of winding up
7. To share in the surplus
8. To call an extraordinary general meeting
Termination of Membership
1. Transfer of share
2. Death of member
3. Member is adjudged insolvent
4. Surrender of shares
5. Forfeiture of share
6. Company exercising lien
7. Buy back of share
8. Redemption of preference share
9. Rectification of register
10. Compulsory sale of shares
 Directors
• Section 149(1) of the Companies Act, 2013 requires
that every company shall have a minimum number of
3 directors in the case of a public company,
two directors in the case of a private company, and
one director in the case of a One Person Company.
A company can appoint maximum 15 fifteen directors.
Definition of Directors
• “Director” means a director appointed to the
Board of a company (section 2(34)) . The words
deemed director have been removed in the 2013
Act
Women Director
• The concept of Women Directors and Independent
Directors was introduced through Companies Act,
2013. Section 149 of the Companies Act, 2013 and
the Companies (Appointment and Qualifications of
Directors) Rules, 2014 deal with the provisions
pertaining to the directors on board of a company.
WOMAN DIRECTOR
• Second proviso to sub-section (1) of Section 149 of the Companies Act,
2013 prescribes that certain class of companies as prescribed shall at
least have one woman director on its board.
• Rule 3 of Companies (Appointment and Qualifications of Directors)
Rules, 2014 deals with Woman Director in detail and it also prescribes
the class of companies as referred to in Section 149 of the Act on which
this provision is applicable. The said rule lays down the following:
Retirement of directors
• According to sec 152(6) of the companies
act,2013 2/3 of the total directors(*) are liable to
retire by rotation and those directors are called
as Retiring directors. out of the retiring directors
(2/3rd of Total number of directors) 1/3rd of directors
is liable to vacate the office
Board of Directors
very company shall have a Board of Directors
consisting of individuals as directors and shall have—
(a) a minimum number of three directors in the case of
a public company, two directors in the case of a
private company, and one director in the case of a One
Person Company; and
(b) a maximum of fifteen directors:
Cont…
Provided that a company may appoint more than fifteen
directors after passing a special resolution: Provided
further that such class or classes of companies as may be
prescribed, shall have at least one woman director.
(2) Every company existing on or before the date of
commencement of this Act shall within one year from such
commencement comply with the requirements of the
provisions.
Director Identification Number (DIN)
• No person shall be appointed as Director unless he has DIN- Section 152 (3)
of the 2013 Act
• Section 153 of the 2013 Act- every Director must apply for obtaining DIN

• Section 154 of the 2013 Act – central Govt. Will allot DIN to an applicant in
prescribed manner within 1 month
• Section 155- a person cannot have more than one DIN

• Section 156- every director to inform his DIN to company within 1 month
form receipt of number form Central Govt.
• Section 157- every company to intimate DIN to ROC within 15 days of
receipt of information form the director
 Disqualification of Directors
• Where he/she has been declared as a person of unsound mind by a
competent court.
• Where he/she is an undischarged insolvent.
• Where insolvency has been applied for, but the application still stands
pending.
• Where there is an offence involving moral turpitude that he/she has been
convicted of and sentenced with imprisonment for a period of not less
than six months.
• Any court/Tribunal has passed an order that disqualifies him from being
appointed as a director.
• Where he/she holds the shares of any company and has not made the
payment of any such call, provided six months have passed since the last
date to pay such call money.
Cont..
• At any time during the final preceding five years, he/she has been convicted of an
offence involving related party transactions which are governed under Section
188 of the Companies Act, 2013.
• Where he/she has not obtained a Director Identification Number (“DIN”).
• Where he/she is the director of a company that has either –
• a. Failed to file the annual returns for 3 years running
• b. Failed to pay interest on/repay the deposits for over a year
• c. Failed to pay any dividend that was declared for over a year
• d. Failed to redeem debentures or pay interest on debentures for over a year
• .
Position of Director
• Legal position of a Director : As agent sometimes as
trustees and sometimes as managing partners
• Director are entrusted with collective
responsibility of managing and director affairs of
the company. They are professional men appointed
by shareholders. A director is not an employee of
the company.
Duties and Rights of a Director
• Directors to act according to Articles
• Directors to act in good faith and in interest of all stakeholders (Section
166(2)
• Exercise due diligence care and independence (section 166(3))
• No conflict of interest with company (Section 166(4))
• No undue gains or advantages ( Section 166(7))
• Not to assign his office (Section 166(6))
• Punishment for not discharging the duties (Section 166(7))
• Obedience
• Diligence
• Loyalty
The duties of an Individual director
• Attend Board meetings
• Filing consent
• Duty to disclose interest
• Duty to disclose particulars
• Not to engage in insider trading
 Meetings
• Meeting is coming together of two or more person face to face
so as to be in each others presence of company.
• The shareholders are only involved in taking major policy
decision about the company. These decisions are taken by them
in the meetings their decision are expressed in the form of a
“resolution”. Every year one meeting of the company has to be
organized. This is called Annual General Meeting (AGM) . In
addition meeting of members may be called to transact urgent
business. Such meeting is called “Extra-ordinary General
Meeting (EOGM)
Annual General Meeting (AGM)
• Every company must hold a general meeting in addition to any
other meeting . Minimum business to be transacted to AGM
termed as “Ordinary business”
• Class meeting: sometimes a meeting is called of a particular
class to pass resolution affecting that class e.g. Meeting of
preference shareholders or debentureholders
Essentials of a Valid Meetings
• Calling of meeting with authority of boards

• Notice of meeting giving time, venue and date

• 21 days advance notice

• Agenda of meeting

• Quorum (50 member-1/3=17 minimum number of people to present)

• Proxies

• Chairperson of meeting

• Resolution at meeting

• Voting by show of hand (and by poll if demanded)

• Minutes of the meeting

Procedure of the meeting
Who should attend the General meeting?
• All directors
• Chairperson of audit committee
• Auditors, represented by partner who has signed
the audit report
• Practicing company secretary who has signed the
secretarial compliance certificate
Conduct of a Meeting
• Calling meeting to order and announcing Quorum
• Preliminary Announcements
• Proposing and seconding a Resolution
• Chairperson’s speech at General Meeting
Agenda of the Meeting
• Adjournment of General Meeting
• How to Adjourn the meeting ( there is no statutory
provision that meeting can be adjourned by ¾ majority
only
• Situation where chairperson can adjourn meeting on his
own
• Fresh notice of adjourned General meeting
• Distinction between postponement or cancellation of
meeting and Adjournment of meeting
• Exemption form holding AGM at Registered office or doing
Business hours
Notice of Meeting
• Minimum notice period for convening a general meeting

• Duration of Notice (21)

• Meeting with shorter notice with consent of members

• Manner of giving notice of meeting to members

• Sending notice by post

• Sending notice through electronic mode

• Notice as text or link or attachment in PDF form

• Opportunity to member to register/change address

• Subject line of e-mail

Cont….
• Sending mail from in-house facility or R and T agent
• Notice also on website
• Accidental omission to give notice
• Persons entitled to receive notice of a general meeting of a
company
• Publishing of notice
• Notes to the notice
• Attendance slip may be sent
• Proxy form along with notice of general meeting
• Explanatory statement of material facts
 Module III
The Indian Partnership Act, 1932 and
Limited Liability Partnership ,2008
The law of partnership is contained in the Indian Partnership
Act. 1932 which came into force on 1st Oct 1932. Prior to the
enactment of the Act.
Concept of Partnership
Definition
Partnership is the relation between
persons who have agreed to share
the profits of a business carried on
by all or any of them acting for all.
Essentials elements of partnership
• Association of two or more persons
• There must be an agreement
• Sharing of profit of business
• Mutual agency
Who may be Partners

• Alien enemy
• Minor
• Person of unsound mind
• Corporation
Who are not partners
• The members of a HUF carrying on a family
business
• A burmese Buddhist husband and wife carrying
on business
• Lender of money to persons engaged or about to
be engaged in any business, receiving a rate of
interest
Types of Partnership
• Partnership for a fixed term
• Partnership- at-will (sec. (7))
• Particulars Partnership (sec (8))
Types of Partners
• Partners in profit only
• Sub-partner
• Actual Partners
• Sleeping or Dormant partner
• Nominal partner
Basis of Difference Partnership Company
It is a contract in which two or more It is a legal entity in which a group of
persons are agreed to share persons agreed to share ownership
Meaning
profits/losses, ownership, but not management for a specific
responsibilities, and duties. purpose.
It is regulated by the Partnership It is regulated by the Companies
Governed By
Act,1932. Act, 2013.
The registration of a Company with
The registration of a Partnership
Registration the registrar of companies
firm is not compulsory.
is compulsory.
The members of a Partnership firm The members of a company are
Members
are known as Partners. known as Shareholders.
In the case of a public company,
a minimum of 7 members are
To form a partnership firm,
required with no maximum limit.
the minimum number of partners
Number of Members Whereas for a private company, at
is two with a maximum limit
least two members are required
of 50 members.
with a maximum limit
of 200 members.
It is not a separate entity as the The company is a separate legal
Separate Entity partners of the firm collectively are entity from its members and
known as a Partnership firm. directors.
A partner cannot transfer his profit The transfer of shares is not
Transfer of Shares share to anyone without the consent restricted except the private
Basis of Difference Partnership Firm Joint Hindu Family Firm

Two or More persons come

together for some business JHF conducts business inherited
Meaning activity & agree to share as per Hindu law, is called Hindu
profit & loss is called partnership Joint family firm.
firm
Partnership firm emerge out of JHF, firm created by the
Creation
contact between two person Operation of Hindu law
Partnership firm owned by two There is no limit. Since
Membership or more and maximum 10 in membership keep changing
banking and 20 in other firms depend upon the birth and death
All partners have equal
Management Management
managerial right
A minor member can be
admitted to the benefits of A male minor becomes a
Minor Member
partner with the consent of all member by his birth
the partner
Liability of all the partners is Only karta liability is unlimited,
Liability of Members
unlimited co-percener’s liability is limited.
Basic of Difference Partnership Co-ownership

Co-ownership may or may not be based

on agreement. it can also arise by
Contract Partnership always arises out of contract operation of law. Such as by inheritance.
on the death of father, sons and
daughters become co-owners of property

The limit for maximum number of

There is no ceiling on the maximum limit
Number of partners partners is 20 in a firm and 10 for
of co-owners.
banking

A partner is an agent of the other partners. He A co-owner is not the agent of the other co-
Agency relationship can bind them for his acts in the ordinary owner. Every co-owner is responsible for his
course of business own deeds only

A partnership is always entered into for A co-ownership does not involve sharing of
Sharing of profit and loss
business. It involves haring f profits and losses profits and losses

If a partner spends money for the business, he If a co-owner can transfer his right and interest
Right of investment
can demand its repayment without the consent of the other co-owners.

A minor cannot enter into a contract and as

Minor such is not able to become a regular partner of a A minor can be the co-owner of a property
firm

Partnership can be dissolved on the insolvency, A co-ownership cannot be dissolved on any

Dissolution
death misconduct etc or a partner such grounds
The consumer protection Act,1986 and
competition Act 2002