East Bay Contracts Attorney Discusses
You spend years building a successful business, but at some point the time comes to sell it. Given all the emotion involved in making that move, it pays to plan ahead to protect your investment as you move through the selling process. One key move: Talk to your business attorney about drafting a strong confidentiality agreement (sometimes called a non-disclosure agreement, or “NDA”) to use with every prospective buyer, their employees and their advisors. The non-disclosure agreement should be drafted and signed before disclosing confidential or proprietary information to the potential buyer.
Why You Need a Confidentiality Agreement
You wouldn’t buy a used car without a mechanic giving it a once-over. Savvy business investors will want to review your financial data, operating information and other key aspects of the business before they make an offer. During this due diligence process, many business secrets and confidential information will be disclosed. Unscrupulous would-be buyers can take this information and open a competing business, leaving you with nothing. A confidentiality agreement protects you from this risk. The process of negotiating the confidentiality agreement will also help you identify those potential buyers that are serious about buying your business and sort them from those who are likely trying to obtain and use your confidential and proprietary information without paying for it.
What Should Be Included
Every confidentiality agreement will vary depending on the type of business to be sold and the information to be protected. An experienced business transactions attorney will be able to draft and negotiate the contract to ensure that it covers the information that needs to be protected and is enforceable.
A confidentiality agreement should usually include the following terms:
- Identification of the parties.
- Definition of what is to be confidential.
- The scope of the buyer’s confidentiality obligation.
- The exclusions from confidentiality.
- The term of the agreement.
Experienced Commercial Attorney For Your Business Needs
The Bay Area law firm of Poniatowski Leding Parikh can meet all your legal business needs. Our commercial attorneys can draft and negotiate confidentiality agreements and business sale contracts and advise you on related issues. With three offices to serve you (Oakland, Pleasanton, and Castro Valley), you can call us today at (510) 881-8700 to schedule an appointment.