Thursday, April 19, 2012
Keeping Secrets Secret
Thinking about selling your business? Perhaps you have entered into informal discussions with a possible buyer. The buyer is looking for some more detailed information about your business in order to decide whether he wants to make you an Offer. Maybe he wants some past financial records or other confidential information in order to determine price. How do you give him this information, before the deal is even made? Using a Nondisclosure & Confidentiality Agreement can be helpful. It will outline the terms upon which you agree to provide certain confidential information, and it will set out how it can be used, to whom it can be disclosed and when it has to be returned. This can be a separate stand-alone agreement, or similar wording can be incorporated into a letter of intent, where the parties at least agree that it is their intention to buy and sell and they will be entering into negotiations in this regard. The agreement, no matter the form, will help to clarify the rights and obligations of the parties, and may assist with narrowing down some of the issues to be resolved before a definitive Agreement of Purchase and Sale can be drawn up. Being careful with your business secrets just makes good business sense.