The Non-Disclosure Agreement in a Business Sale
After prospective buyers have been identified and targeted, they must sign a Non-Disclosure Agreement, also called an NDA or Confidentiality Agreement, before we provide them with the Confidential Information Memorandum or any other information about your business.
The NDA is critical as it protects your financial information and other sensitive information about your business from being disclosed.
Major conditions of the Non-Disclosure Agreement
- The Alberta Business Exchange is identified as the agent for the business.
- The scope of the confidential information is defined. In our agreement, the scope is very broad and includes not only information provided in the Confidential Information Memorandum, but also any and all information disclosed in any manner—written or in conversation.
- The information provided cannot be used for any other purpose than evaluating this opportunity.
- All communications must be with Alberta Business Exchange, and not with the seller, the seller’s employees or shareholders, or any other parties.
- The information will only be disclosed to the prospective buyer’s team and representatives, and then only to the extent necessary.
- The information cannot be copied or reproduced, and must be returned upon request.
- The information must not be used by the prospective buyer to solicit any employees of the business.
- The provisions of the agreement stay in effect for two years.
Failure to honour these conditions will be grounds for the seller to sue the party that breached these conditions for damages incurred.