During any purchase or sale of a business, the buyer will always want to be fully aware of the position of the business the buyer is acquiring. The seller will therefore need to disclose confidential information to the buyer and the seller will want to ensure that any information disclosed remains confidential regardless of whether the transaction proceeds or not. The seller will therefore want to ensure confidentiality and non disclosure agreements are put in place. Below are several issues which need to be considered when disclosing confidential information:
- Who are the parties to the agreement? Is the buyer part of a group, does the group need to be included as a party, do any third parties need to be bound by the agreement, e.g. advisers and employees, etc.
- Has confidential information been defined and the confidential information identified? This includes limiting the definition of confidential information to the most crucial information and does not include information that is already public knowledge and known to the buyer.Â
- Where appropriate, the information needs to be marked ÂconfidentialÂ, with all the formats the information can take also being identified.Â
- All current information held by the seller needs to be reviewed to check the current confidentiality undertakings and adequate security procedures need to be put in place.
- Any disclosure of information should be planned between the parties, with a schedule being put in place identifying when disclosure is to take place, where and who the information may be disclosed to.Â
- Is there a contingency plan in place should the deal fall through or if the information is leaked?
- Ensure all formalities have been carried out and the agreement has been executed correctly with each party keeping a signed copy.
For further information on confidential information or buying and selling a business please contact Izaz Ali on firstname.lastname@example.org.