A big part of selling a business is protecting private and confidential business information from becoming public, hence it’s quite common for sellers and brokers to ask buyers to sign a Confidentiality Agreement before disclosing information or releasing documents related to the business.
What is a Confidentiality Agreement?
Also referred to as an NDA (Non Disclosure Agreement), is a common legal agreement used between two or more parties to share sensitive information and not disclose or discuss with anyone outside of the agreement.
When to use a Confidentiality Agreement?
Using a confidentiality agreement when dealing with buyers is optional and entirely up to the seller. In my view, it’s always better to play it safe, rather than be sorry later. If confidentiality is important, always use one to safeguard your sensitive business information when dealing with prospective buyers.
Will Buyers will Sign a Confidentiality Agreement?
It’s frustrating for buyers as they have to sign a confidentiality agreement for each business they want information on. Most buyers will be familiar with the process, if they are serious and genuine, they will be happy to sign one if asked. If not, sellers should be wary and cautious about what information they disclose to buyers without being protected by a confidentiality agreement.
Get the Template
Download our easy to use Confidentiality Agreement Template in Microsoft Word format which can be easily customised to suit your needs (Australian Version).
Consult a Professional.
Always consult a qualified professional for advice.
By Peter Kais | hospitalitytrader.com
