Lucido Global Business Brokers

Lucido Global Business Brokers

Adding Value, Creating Wealth

  • Home
  • About Us
    • About Us
    • Suite of Services
    • Our Team
  • Buying a Business
    • Buying a Business
    • Buying a Business Tutorial
  • Selling a Business
    • Selling a Business
    • Selling a Business Tutorial
  • Visas & Immigration
  • Businesses For Sale
    • Featured Businesses
    • Florida Businesses
  • Blog
  • Contact Us

The Confidentiality Agreement

By Rod Burns Jun 9

When considering selling their companies, many owners become paranoid regarding the issue of confidentiality. They don’t want anyone to know the company is for sale, but at the same time, they want the highest price possible in the shortest period of time. This means, of course, that the company must be presented to quite a few prospects to accomplish this. A business cannot be sold in a vacuum.

The following are some of the questions that a seller should expect a confidentiality agreement to cover:

  • What type of information can and can not be disclosed?
  • Are the negotiations open or secret?
  • What is the time frame for which the agreement is binding? The seller should seek a permanently binding agreement.
  • What is the patent right protection in the event the buyer, for example, learns about inventions when checking out the operation?
  • Which state’s laws will apply to the agreement if the other party is based in a different state? Where will disputes be heard?
  • What recourse do you have if the agreement is breached?

Obviously, executing an agreement does not mean a violation can’t occur, but it does mean that all the parties understand the severity of a breach and the importance, in this case, of confidentiality.

While no one can guarantee confidentiality, professional intermediaries are experienced in dealing with this issue. They are in a position to understand the extreme importance of confidentiality in business transactions as well as the devastating results of a breach in confidentiality. A professional intermediary will require all legitimate prospects to execute a confidentiality agreement.

A confidentiality agreement is a legally binding contract, enforceable in a court of law. It establishes “common ground” between the seller, who wants the agreement to be extensive, and the buyer, who wants as few restrictions as possible. It allows the seller to share confidential information with a prospective buyer or a business broker for evaluative purposes only. This means that the buyer or broker promises not to share the information with third parties. If a confidentiality agreement is broken, the injured party can claim a breach of contract and seek damages.

© Copyright 2015 Business Brokerage Press, Inc.

Photo Credit: pippalou via morgueFile

Categories: Buyer Articles

Prev
Next

Featured Businesses

Subscribe to our Newsletter

No worries, your information is safe with us. We hate spam too!

From Our Blog

Cultivating Your Brand Strategy

May 27, 2023

Your brand is a customer’s perception about your business. It determines how they feel about the … Read More »

An Overview of Term Sheets

May 19, 2023

If you’re planning on a business agreement to buy or sell a business, you’ll want to know about term … Read More »

Is Your Deal Really Going to be Successful?

April 29, 2023

If you’re selling your business and things are looking positive with your buyer, you might be … Read More »

When Should Sellers Proceed with Caution?

April 22, 2023

Selling your business is typically quite an involved process that takes a series of months. Sellers … Read More »

How Improved Negotiation Tactics Can Benefit Your Deals

April 15, 2023

There is no underestimating the importance of negotiation when you are buying or selling a business. … Read More »

How Leases Factor into Business Sales

April 1, 2023

If you’re planning to buy or sell a business that involves a lease, this can lead to an extra level … Read More »

Global Business Brokers

Contact Us

Lucido Global Business Brokers
Keller Williams Coral Gables
550 Biltmore Way PH II A-B
Coral Gables, FL 33134
Office (305) 662-7325
Direct (954) 913-5464
rod@globalbusinessbrokers.net

Adding Value, Creating Wealth

  • Cultivating Your Brand Strategy
  • An Overview of Term Sheets
  • Is Your Deal Really Going to be Successful?
  • When Should Sellers Proceed with Caution?
  • How Improved Negotiation Tactics Can Benefit Your Deals

Join Our Team

Copyright © 2023 Lucido Global Business Brokers
MENU
  • Home
  • About Us
    • About Us
    • Suite of Services
    • Our Team
  • Buying a Business
    • Buying a Business
    • Buying a Business Tutorial
  • Selling a Business
    • Selling a Business
    • Selling a Business Tutorial
  • Visas & Immigration
  • Businesses For Sale
    • Featured Businesses
    • Florida Businesses
  • Blog
  • Contact Us