Expelling a Partner UK: Grounds & Process Guide

Overview

Expulsion is the formal removal of a partner from a partnership against their wishes. It is different from a partner resigning, retiring, or being bought out by agreement. It is a unilateral act by the remaining partners, and because of that, the law treats it with some suspicion.

The starting point in England and Wales is section 25 of the Partnership Act 1890, which states that no majority of partners can expel another partner unless a power to do so has been agreed in writing between them. In practice, this means two things.

First, if there is no written partnership agreement, or the agreement is silent on expulsion, then expulsion is not legally available as an option, and the partnership may need to be dissolved instead. Second, where an expulsion clause does exist, it must be followed precisely.

Any departure from the agreed procedure can leave the expelling partners open to a claim for wrongful expulsion, unpaid share of profits, and damages.

Key steps

1. Read the partnership agreement first. Before taking any action, pull out the partnership agreement and read the expulsion clause closely. Look for the specified grounds, the notice period required, who needs to vote, the majority threshold, and any requirement to give the partner a chance to respond. These details matter because courts will enforce them strictly.
2. Gather evidence of the grounds for expulsion. If you are relying on misconduct, breach of the agreement, bankruptcy, or persistent underperformance, document everything. Keep copies of correspondence, financial records, client complaints, or anything else that supports the case. Vague concerns or personal friction will not usually be enough to justify expulsion on their own.
3. Take proper legal input before you act. Expulsion disputes are among the most expensive partnership claims that reach the courts. Before serving any notice, get a second opinion on whether the grounds are strong enough and whether the procedure you plan to follow matches the agreement. A mistake at this stage can unravel the whole process months later.
4. Follow the notice and voting procedure exactly. Serve written notice in the form required, give the partner the period specified to respond or remedy the issue if relevant, and hold any required vote. Document the meeting, the resolution, and the reasons. If the agreement requires unanimity among the remaining partners, one dissent is fatal.
5. Deal with the financial exit cleanly. Once expulsion takes effect, the outgoing partner is usually entitled to their capital account, share of undrawn profits, and sometimes a share of goodwill depending on the agreement. Agree a valuation method, settle tax points, update Companies House or HMRC where needed, and put a deed of retirement or similar document in place to record the terms.

Common questions