What occurs if a partner is expelled by majority decision in a partnership?

When a partner is expelled by majority decision in a partnership, the partnership agreement typically remains intact, albeit with new terms reflecting the changes in the partnership structure. This means that the remaining partners can continue to operate under the existing partnership agreement, but adjustments may need to be made to account for the departure of the expelled partner.

The partnership's dynamics change; for instance, the remaining partners may decide to redistribute the ownership interest or amend profit-sharing ratios as outlined in the original partnership agreement. However, the foundational aspects of the partnership remain unless otherwise stated in the partnership agreement.

This option recognizes the ability of a partnership to adjust and continue functioning despite changes in its membership, as long as the actions taken comply with the provisions set out in the partnership agreement and relevant laws.