Legal Question in Business Law in California

Yes if you structure things right.

After reading your question a couple of times, I have maybe figured out what you're asking. You own a business that has two or more stores. Someone wants to "buy in" as an equity owner, but only with respect to one location. Can you do it? Maybe, but to "structure things right" may involve a fundamental reorganization of the business.

First, I assume when you want to sell equity for a specific store, you're not talking about the store building itself (which more likely than not, you lease rather than own anyway). I assume instead that you want to sell equity in the business you conduct at that store.

The next question that arises is "How is the business currently structured?" Is it a sole proprietorship, a partnership, an LLC or a corporation?

If the business is currently a proprietorship, taking in an equity investor will create a partnership. This is relatively simple conceptually, but needs to be done with great caution and forethought. The result will probably be that the new partnership operates the one store while your proprietorship operates everything else; two businesses will in fact exist, side by side, and you'll need two sets of books. The entire business could also be operated by the new partnership, but both the partnership agreement and the bookkeeping would have to be set up to reflect the new partner's somewhat limited interest. Sounds difficult.

If the business is incorporated, one approach would be to spin off the shared-equity store into a subsidiary in which the equity investor would have a partial interest; in other words, the subsidiary would not be wholly owned by the parent corporation.

I'd recommend that your investor and you sit down for a chat with an experienced business attorney who can advise based upon a full understanding of how the business is presently organized and what the parties hope to accomplish.