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Expulsion of a partner

Generally expulsion is discouraged by law and a partner cannot be expelled from the firm. He can be expelled only if the following conditions are satisfied:
  • The power of expulsion must be available to the partners by an express contract between them
  • The power to expel should be exercised by majority of the partners prescribed in the contract
  • It should be exercised in absolute good faith
The test of good faith implies that:
  • Expulsion must be in the interest of the partnership
  • The partner to be expelled must be served with a notice
  • The expelled partner should be given a chance to defend himself

Regular expulsion

When a partner is expelled subject to satisfaction of the above conditions, his expulsion will be regular. The liabilities and rights of an expelled partner will be the same as that of a retiring partner.

Irregular expulsion

When the expulsion takes place without the satisfaction of the conditions given above, the expulsion is irregular and the court may set aside the expulsion. The expelled partner in this case has any one of the two remedies
  • To claim re-instatement as a partner
  • To sue for his share of capital and profits in the firm

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