Complex coacervation between oppositely charged polyelectrolytes (PEs) and colloids (i.e. micelles and proteins) has increasingly become popular due to the use of these materials in a range of applications including but not limited to personal care, biomaterials, protein purification, and food science. In taking advantage of complex coacervation, which is a liquid-liquid phase separation, precipitation has always represented a problem by introducing inhomogeneities, irreversibility and irreproducible kinetics. Therefore, understanding the dominant factors driving the formation of precipitates is important to control outcomes. In this work, we have performed comparative studies of coacervation and precipitation in model PE-colloid systems to investigate the relationship and mechanism of formation of coacervation vs precipitation. Studies of hyaluronic acid (HA), and tragacanthin (TG) - two negatively charged PEs with different structural properties - with oppositely charged proteins β-lactoglobulin (BLG), and/or a monoclonal antibody (mAb) showed that the two phases form simultaneously. However, our results suggested that coacervates do not directly turn into precipitates, but that both species are in equilibrium with free protein and PE in the bulk phase. However, precipitation and coacervation are different in that the number of proteins that bind to each polyanion to neutralize the overall charge is important in coacervation, whereas the proximity of binding, regardless of the stoichiometry, determines precipitation. Steric shielding due to bulky PE side chains can prevent close protein to PE binding which then eliminates precipitation. While the structure of the PE affects the formation of coacervation vs precipitation in model PE-protein systems, we also found that the charge density of the colloid may have an influence. To study colloid charge density effects, we chose the sodium dodecyl sulfate (SDS) and Triton-X100 (TX100) mixed micelle system, because of the ability to tune the surface charge density by varying the molar ratio of the anionic surfactant SDS. The PE-micelle system showed separate regions of coacervation and precipitation in contrast to the PE-protein system in which the two regions were coinciding. Calorimetric studies revealed a large endotherm for the formation of precipitates. This large endotherm can be overcome by the release of counterions. Coacervation is also driven by counterion expulsion, therefore there must be a difference in the nature of counterions expelled. We defined the counterions surrounding each micelle as bound or localized. Bound counterions are located close to the micelle surface whereas localized counterions are those that are attached to charged groups on the micelle surface and are responsible for precipitate formation. This is because, the expulsion localized counterions favors the ion pairing between charged groups of PDADMAC and SDS by making the interaction between the charged groups stronger thus leading to precipitation. Overall, coacervation and/or precipitation can occur in PE-colloid systems when critical conditions are suitable. The Strength of interaction is the key to yield precipitation vs. coacervation. Bulky PE side chains cause steric shielding, which weakens the interactions therefore favors coacervation. Similarly, uniform colloid charge distribution can also cause weak interactions and eliminate precipitate formation, while concentrated charge patches on protein surface favor strong PE-protein binding thus yielding precipitate formation.