Sections 33 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 33 says a partner cannot be thrown out by a majority unless the deed gives that power and it is used in good faith. Section 34 says that a partner adjudicated insolvent stops being a partner on the date of the adjudication order, and sets out what follows where the firm carries on.
A partner may not be expelled by any majority of the partners, except in the exercise, in good faith, of powers conferred by contract between the partners (33(1)). An expelled partner is treated as a retired partner for the notice and liability rules in section 32(2), (3) and (4) (33(2)). A partner adjudicated insolvent ceases to be a partner on the date of the adjudication order, whether or not the firm is dissolved (34(1)). If the contract keeps the firm going, his estate is not liable for the firm's acts, and the firm is not liable for his acts, done after that date (34(2)).
Section 33: expulsion
33(1): the default is "no"
Because the power must come from the deed, an expulsion clause is a matter for a changes in partnership agreement exercise if your deed lacks one.
Without a power in the contract between the partners, a majority cannot expel a partner. The sub-section allows expulsion only in the exercise of powers conferred by contract between the partners, and the exercise must be in good faith.
| Test | What the text requires |
|---|---|
| Source of power | A power conferred by contract between the partners |
| How exercised | In good faith |
| Who exercises it | The text says "any majority of the partners" cannot expel except in these terms, so the contract decides who acts |
So a deed that says "a partner who commits a stated breach may be expelled by a majority of partners" gives a power. If the partners use it for a purpose other than the one it was meant for, for instance to force a partner out to take his share of the profits, the "good faith" requirement is at risk. The text does not define good faith or list examples. For a wider treatment of expulsion, see expulsion of a partner from the firm.
Example. The deed of Rao & Sons provides that a partner who is absent from the business for six months continuously may be expelled by a resolution of three of the four partners. Three partners pass a resolution against Kiran, who has been abroad for eight months. Because the power comes from the deed and is used for the purpose it was written for, it fits section 33(1). Had there been no such clause, the same resolution would not have been enough.
33(2): treated as a retired partner
The provisions of sub-sections (2), (3) and (4) of section 32 apply to an expelled partner as if he were a retired partner. That means:
- he can be discharged from liability for earlier acts by agreement with the creditor and the continuing partners (32(2));
- he and the partners remain liable as partners to third parties until public notice is given, subject to the proviso for third parties who did not know he was a partner (32(3));
- the notice may be given by him or by any partner of the reconstituted firm (32(4)).
This is explained in section 32. The practical result is that the continuing partners should publish notice of the expulsion promptly, since they too remain exposed under 32(3) if they do not.
Section 34: insolvency of a partner
34(1): the partner drops out on the date of the order
Where a partner is adjudicated an insolvent, he ceases to be a partner on the date on which the order of adjudication is made, whether or not the firm is thereby dissolved. The text does not wait for the firm to be wound up; the person's status as partner ends on that date.
34(2): where the contract keeps the firm alive
Where under a contract between the partners the firm is not dissolved by the adjudication of a partner as an insolvent:
- the estate of the insolvent partner is not liable for any act of the firm done after the date of the adjudication order; and
- the firm is not liable for any act of the insolvent done after that date.
Section 42(d) provides that, subject to contract between the partners, a firm is dissolved by adjudication of a partner as an insolvent; see sections 42 and 43. Section 34(2) supplies the rule for the case where the partners have agreed otherwise.
Example. The deed of a four-partner firm says that the insolvency of a partner does not dissolve the firm. Neha is adjudicated insolvent on 1 June. Under 34(1) she stops being a partner that day. Under 34(2), her estate is not liable for an order the firm places in July, and the firm is not liable for something Neha does in her own name in July.
The text of section 34 says nothing about earlier acts or about what happens to her share in the firm's property. For the accounting entitlement of an outgoing partner or an estate, see section 37, and for insolvency law generally, the insolvency statute itself, which this article does not cover.
At a glance
| Section | Event | Result | Subject to contract? |
|---|---|---|---|
| 33(1) | Expulsion by majority | Not allowed, save in good faith under a contractual power | The power must come from the contract |
| 33(2) | Expelled partner | Treated as retired for 32(2), (3), (4) | Not stated |
| 34(1) | Partner adjudicated insolvent | Ceases to be a partner on date of the order | Not stated |
| 34(2) | Firm not dissolved by contract | Neither side liable for acts after the order date | Applies where the contract keeps the firm alive |
Practical points
- Put an expulsion clause in the deed if you want one, stating the grounds and the procedure. Without it, section 33(1) leaves the majority no power.
- Act in good faith and keep written reasons.
- Give public notice of an expulsion as for a retirement, so the firm's exposure under 32(3) stops.
- State what happens on insolvency of a partner in the deed, since sections 34 and 42(d) point to the contract.
Need help with expulsion clauses?
If you want a lawful route for removing a partner, the place to start is the deed. Our changes in partnership agreement team can add an expulsion or insolvency clause, or document an expulsion already made. Tell us what the deed currently says and we can suggest a plan.
Key takeaways
- A majority cannot expel a partner unless a contract between the partners gives the power and it is exercised in good faith (33(1)).
- An expelled partner is treated as retired for the notice and liability rules in section 32 (33(2)).
- A partner adjudicated insolvent ceases to be a partner on the date of the adjudication order (34(1)).
- Where the contract keeps the firm going, neither the insolvent's estate nor the firm is liable for the other's acts after that date (34(2)).
Read next
- Section 32: retirement of a partner
- Sections 35 and 36: deceased partner's estate and competing business
- Sections 42 and 43: dissolution on contingencies and by notice
- Expulsion of a partner from the firm
Disclaimer: Based on the text of the Indian Partnership Act, 1932 as consulted on 1 October 2026. Several States have amended the registration chapter and make their own rules, forms and fees for the Registrar of Firms. This article is general information, not legal advice; check the official text and your State's rules before acting.