Confidentiality is Critical in Business Sales

Given that confidentiality is critical to business sellers, we have provided our Non-Disclosure Agreement or NDA on our website for your review. Sometimes a Non-Disclosure Agreement is referred to as a Confidentiality Agreement.

While professional business brokers and investment bankers make it a strict practice to maintain confidentiality, we insist that all potential buyers sign an attorney drafted NDA because it is critically important that no unauthorized person finds out that a business is for sale until the transaction has closed and the seller is ready to make an announcement.

While there are many reasons to maintain confidentiality, we have listed a few of the major reasons:

  • Competitors may use the information against the business to acquire customers, clients, and employees of the business being sold.
  • Employees may feel threatened and leave or they may ask for more compensation in order to stay.
  • If key employees believe the owner is making a large profit on the sale, they may demand bonuses as a condition of staying.
  • Competitors, clients, and customers may question whether the company will stand behind its contractual obligations.
  • Vendors and contractors may put the business on COD terms causing a cash flow problem.
  • Employee theft may increase because they believe any theft will not be detected.


Please call Michael Chulak or any of our agents with questions.

 

PacificBusinessAdvisors.net
Office: 818-991-5200
Direct: 818-991-9019