Mixing Business and Friendship? Read This First.

I want to sell 30 shares of my small business to a trusted friend. What kind of paperwork should I ask my lawyer to draw up? Does a notary also need to be present?

Kudos to you for wanting to get your lawyer involved. Many small business owners will draw up their own papers with close friends, and both the friendship and the business suffer. Your attorney can draft your partnership agreement (known as a "shareholders agreement" for corporations or an "operating agreement" for LLCs), which will get the ball rolling. There will also be other documents, depending on your business.

But perhaps more important are the questions you need to ask yourself. What role will your friend play in connection with the business? Will this person be shoulder-to-shoulder with you on a daily basis? What is your friend’s background, skill set and network? Is this friend simply providing additional funds as an “investor”? Also essential is what your friend envisions. Before either of you sign anything, do some soul searching and have some long conversations. You should both have a clear understanding of what you want and expect of each other.

Related: Whose Trademark Is It Anyway?