Process
A non-disclosure agreement is a contract that requires the other party to keep shared company information private and use it only to evaluate a deal.
A non-disclosure agreement, or NDA, is a written promise to keep information private. In a sale, buyers sign one before they see your financials, customers or plans.
For example, a buyer signs an NDA, then receives the confidential information memorandum. The NDA says the buyer may use it only to judge the deal and must not share it, contact your customers or hire your staff without permission.
NDAs matter because a sale involves sensitive facts. Customers, employees and competitors should not hear about it by accident. A solid NDA protects trade secrets and the timing of your news.
Ask your lawyer to review it. Check how long it lasts, what it covers, and whether it limits contact with employees and customers. An NDA does not stop every leak, so share the most sensitive details late in the process.
See the steps ahead in how to prepare your company for a private equity sale. Related: data room.
Related terms
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