{3:35 minutes to read} During negotiations of a business venture or sale, certain confidential information may be passed between the parties in order to determine whether there is a mutual desire to enter into a formal contract. A Non-Disclosure Agreement will protect the confidential information the seller provides to the potential buyer, and eventually, this information may be used to create the actual contract. A standard non-disclosure agreement will contain the following:
- The type of confidential information that will be provided to the buyer
- Detailed explanation on how the buyer can utilize the information
- With whom the buyer is entitled to share said information with
- How long the buyer will be in possession of the confidential business information
- What happens to the confidential information when the non-disclosure agreement is terminated
For instance, if you are the owner of a medical practice and wish to sell, in order to perform their due diligence, the potential buyer will require certain information about the practice before agreeing to the final purchase. This confidential information may include:
- Financial documents;
- How the practice is operated, such as fee schedules, equipment or employee information;
- Marketing and advertising strategies; and
- Intellectual property.
Should you not insist on a non-disclosure agreement to protect you, the potential purchaser could apply your business plan and ideas for their own benefit and just walk away from the deal.
Within a non-disclosure agreement, you may also want to include a non-compete clause, stating that the purchaser cannot utilize or disclose any of the information they obtain for a certain period of time. This will assist in safeguarding your confidential information in order to allow you to negotiate another contract with a different buyer.
If you are looking to sell your business, discuss a non-disclosure agreement with an attorney in order to protect your practice during the negotiations of the sale with potential buyers. This agreement will shield you from future harm.
Our experienced team can help you create a non-disclosure agreement that will protect and safeguard you and your practice. Contact us today at info@rodinlegal.com!
Stephanie J. Rodin, Esq.
Rodin Legal, P.C.
Email: info@rodinlegal.com
Tel: (917) 345-8972
Fax: (917) 591-4428
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