A partner can be expelled only if the partners have expressly agreed a power to do so. Section 25 of the Partnership Act 1890 says no majority can expel any partner without one, however serious the misconduct. Without a power, the other partners are left with dissolving the whole firm, negotiating an exit or asking the court, all of which are slower, costlier and riskier than using a well drafted expulsion clause.

Can the other partners expel a partner if there is no agreement?

No. Section 25 provides: “No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.” The words “express agreement” are significant. Section 19 normally allows partnership terms to be varied by consent inferred from a course of dealing, but an expulsion power has to be expressly agreed. Even a unanimous vote of all the other partners is not enough if the power was never agreed.

The partner concerned may, of course, agree to leave. In practice many exits that are described as expulsions are negotiated retirements, documented by a separate agreement setting out the payout, indemnities and restrictions.

What can partners do instead if there is no expulsion power?

The options under the 1890 Act are blunt:

  • Dissolve a partnership at will. If no fixed term has been agreed, any partner can end the partnership by notice to all the others (sections 26 and 32(c)). The remaining partners may then form a new firm without the unwanted partner. But dissolution ends the firm for everyone, the outgoing partner shares in the assets under sections 39 and 44, and if the others carry on with the old assets without settling accounts, section 42 entitles the outgoing partner to choose a share of later profits attributable to their share of the assets or interest at five per cent a year.
  • Ask the court to dissolve. Section 35 lets the court dissolve the partnership on a partner’s application where another partner has been guilty of conduct calculated to prejudicially affect the business, wilfully or persistently breaches the agreement or makes it not reasonably practicable to carry on in partnership with them, or where dissolution is just and equitable. This is the main route for a fixed term partnership.
  • Charging of a partner’s share. Under section 33(2), if a partner lets their share be charged for a separate debt, the others may opt to dissolve.

None of these removes the partner and leaves the firm intact. That is why the ACCA’s partnership factsheet lists the circumstances for expulsion and the proportion of partners needed among the core contents of any partnership agreement.

What should an expulsion clause contain?

The ACCA says the agreement can allow expulsion on notice with or without grounds, or for specified grounds. Common grounds it lists include breach of the partnership agreement, ceasing to hold a required professional qualification, conduct damaging to the business, poor performance and ill health. A workable clause usually covers:

  • Grounds: specific events, such as bankruptcy, loss of a practising certificate, serious breach or prolonged incapacity, and possibly a general ground for compulsory retirement on notice.
  • Majority: who votes (excluding the partner concerned) and the threshold, for example a stated fraction of the other partners or of profit shares.
  • Procedure: written notice of the allegations, an opportunity to respond, and a meeting before the vote.
  • Effective date and suspension: when the partner ceases to be a partner and whether they can be excluded from the office meanwhile.
  • Financial consequences: how leaving accounts are drawn up, whether goodwill is paid for, and the timing of payments. The ACCA notes that indemnities offered to outgoing partners may not extend to partners who are expelled.
  • Continuity: confirmation that the firm continues among the remaining partners, so expulsion does not trigger a general dissolution.
  • Restrictions: reasonable non solicitation and non dealing covenants.

How must the power be used?

The ACCA states that the power to expel must be exercised in good faith, for the good of the firm and not to secure a collateral advantage, such as acquiring the partner’s share cheaply. The procedure in the clause should be followed exactly; a vote taken without the notice or opportunity to respond that the clause requires gives the expelled partner an argument that the expulsion is invalid.

Discrimination law also applies. Section 44(2)(c) of the Equality Act 2010 provides that a firm must not discriminate against a partner by expelling them, and section 44(6)(c) prohibits expulsion by way of victimisation. Under section 46(6), expulsion includes termination of a partner’s position by the expiry of a period or as a result of dissolution of the partnership, so dissolving the firm to get rid of one partner can still be challenged. The ACCA describes a case where a partner who was pregnant succeeded in a sex discrimination claim after being given notice to end the partnership because of the pregnancy, and warns that expelling for ill health needs care because of disability discrimination rules.

What happens to the expelled partner’s money and liabilities?

The expelled partner is entitled to what the agreement provides. Section 43 makes the amount due to an outgoing partner a debt at the date of departure, subject to the agreement, and section 42(2) removes the claim to later profits where an option to buy the outgoing share is properly exercised. The partner’s balances on capital and current accounts are usually the starting point.

Expulsion does not end liability to outsiders. Section 17(2) keeps the partner liable for debts incurred while they were a partner, and section 36 means creditors who dealt with the firm may treat them as still a partner until they have notice, so customers and suppliers should be told and a Gazette notice placed. For VAT, the firm must notify HMRC, because section 45(2) of the Value Added Tax Act 1994 treats a former partner as still a partner until it does. See partners’ joint and several liability.

For tax, HMRC explains at PM134200 that any change in the persons who make up a partnership technically ends that partnership, and whether a new one is created depends on the facts. The income tax effects for the leaver are covered in partners joining and leaving: the tax consequences.

How does an expulsion work in practice?

Illustration only. A five partner architecture firm has an agreement allowing expulsion by three quarters of the other partners for serious breach, after 14 days’ written notice of the allegations and a meeting. One partner diverts two client projects to a company owned by their spouse. The other four serve notice, hold the meeting, hear the partner’s explanation and vote four to nil to expel. The partner ceases to be a partner on the date the clause specifies. Separately, section 29 requires them to account to the firm for the profit on the diverted work. The firm notifies clients, suppliers and HMRC and places a Gazette notice. The leaving accounts are prepared under the clause, and the agreed sum is paid in instalments.

Had the agreement contained no expulsion power, the four partners could not have done this. If the partnership was at will they could dissolve it by notice and start again, accepting a full winding up of the old firm’s affairs; if it was for a fixed term they would need a court order under section 35.

What mistakes do firms make with expulsion?

  • Having no express power at all and assuming a majority vote is enough.
  • Skipping steps in the clause’s procedure or acting before the vote.
  • Using an expulsion power for an ulterior purpose, such as removing a partner to increase the others’ profit shares.
  • Forgetting the Equality Act 2010, including disability and pregnancy.
  • Failing to give notice to creditors and HMRC, so the former partner remains exposed.
  • Assuming the 1890 Act defaults will deal with the payout; they lead to dissolution, not a clean exit.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.