Legal Question in Entertainment Law in California

Since you said co-writes I am going to assume that both of you contributed equally and should each own 50% of the musical composition (it is best to put this in writing so there are no misunderstandings). If that is the case then this is the situation (and this can get confusing but read it a couple of times and you will understand). Each writer owns 50% of the entire composition. Each writer owns 50% of the entire copyright to the musical composition (and you should register this with the U.S. Copyright Office. With regards to rights within each owner's portion, half of that is considered the publisher's share and the other half is considered the writer's share (so, to answer your last question, royalties are evenly split). When you register the song with ASCAP, BMI, or SESAC then this is what you will designate. You, as the owner of your portion can establish a publishing company to collect your publishing royalties but you will not be entitled to the other owner's publishing whether he or she establishes a publishing company or not.

50/50 is the usual split between publisher/writer. With multiple writers, each writer (or his/her designated publishing company) controls his portion of the so-called "publisher's share"