As the seller of a business it is important to consider the confidentiality aspects of any proposed transaction. A seller will want to ensure that customers, suppliers, employees and competitors are not aware of the proposed sale. Conversely, the buyer will require certain confidential commercial information about the business to be disclosed in order to evaluate the transaction.
We would therefore always recommend that a confidentiality agreement is entered into early on in the process. Also known as a Non-Disclosure Agreement (or NDA), it provides contractual protection against disclosure of the seller’s confidential information and, in some cases, the buyer’s too.
Despite there being an NDA in force, some sellers do not wish to disclose commercially sensitive information, such as customer lists, until they feel comfortable to do so. This is a sensible approach and should be agreed with the potential buyer at an early stage of the negotiations so that everyone understands the approach being taken.
To find out more about confidentiality agreements, see What is a Confidentiality Agreement?