A non-disclosure agreement is a contract in which one or more parties promise not to disclose confidential information that they have shared with one another other as a necessary part of conducting business together. If you are a business owner, there is a good chance that you have confidential information you need to protect. In this article, we explain why you need a non-disclosure agreement.
When Selling or Licensing a Product or Technology
If your business is in the process of selling or licensing a product or technology that you own, you need to ensure that your property remains protected. During negotiations for the sale or licensing of your product or technology, the other party will have access to certain sensitive information. Therefore, in this situation, you should protect such information with a non-disclosure agreement.
When Employees Have Access to Confidential Information
If your business has employees, it is likely that they have access to a variety of private information, such as client lists, manufacturing and supplier agreements, proprietary processes, and financial data. To keep your employees from revealing this information to outside parties or attempting to use it to compete against your business, you should consider having them enter non-disclosure agreements upon their hiring. This would typically be included in a meticulously written employment agreement.
When Presenting an Offer to a Potential Investor or Partner
New partners and investors can expand your opportunities and reenergize your business. However, during discussions with a potential investor or partner, you will likely reveal a substantial amount of sensitive information to the other party. Therefore, before entering talks to bring a new partner or investor aboard, you must ensure the protection of your business’s sensitive information with a non-disclosure agreement.
When Sharing Confidential Information with a Prospective Buyer
Finally, selling your business is another reason to consider a non-disclosure agreement. During the sale process, you will be required to reveal much of your financial, operational, and proprietary information to the other party. This is necessary, of course, because a potential buyer must have access to as much pertinent information as possible before making a final decision. However, if the sale falls through or the prospective buyer isn’t really serious about the purchase, you don’t want to risk having your business’s confidential information stolen and potentially used against you. Therefore, a non-disclosure agreement is highly recommended prior to entering negotiations with a potential buyer.
Contact a Florida Corporate and Business Law Attorney
At Gueronniere, P.A., we provide businesses throughout the state of Florida with personalized legal services. Founded by corporate and business attorney Grace de la Gueronniere, our firm has the resources, experience, and knowledge necessary to fulfill your corporate and business law needs. So, if your business requires assistance in drafting non-disclosure agreements or other business documents, please contact us today to schedule a free initial consultation with our talented Florida corporate and business attorney.