If you are considering making an offer to purchase or sell a business, the first step in any such discussion should be to enter into a confidentiality agreement between the buyer and seller.
A few vital terms of the agreement include, but are not limited to:
- That any information shared between the seller with the potential buyer is “confidential” and no information will be shared by either party except to those employees and outside advisors who may be necessary for the parties to evaluate and potentially close upon an acquisition of the business.
- That the information will remain confidential, even if no agreement to purchase is ever entered.
- That any employee or outside advisor will be made aware of the confidentiality arrangement and will be required to agree to maintain such information in confidence.
- That the potential transaction will remain confidential until the parties reach an agreement and agree to make that information public.
- That the buyer will not utilize any information obtained from the seller in its business, such as the soliciting of seller’s customers or employees based upon information obtained from the seller during negotiations.
A confidentiality agreement should be signed by both parties prior to the exchange of any confidential information. If you have any questions or would like assistance with preparation of a confidentiality agreement, the attorneys at Plager, Krug, Bauer, Rudolph & Stodden, Ltd. are here to help.