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.