Confidentiality and NDAs for a Small Business’ Confidentiality

If you’re worried of people taking your business ideas, a Confidentiality Agreement, also known as a Non-Disclosure Agreement is an agreement that any secret plans or ideas that somebody else would know is in the tightest secrecy. This agreement is only effective if it is signed by the person in question prior to them learning of said secret.

There’re a lot of times when you may need a NDA. Here’s a few examples:

• Showing an invention or business idea to a potential partner, investor, or a distributor.
• Sharing financial info, or similar info with a buyer or co-venture of the business.
• Sharing a product with a buyer or licensee.
• Having a service where employees may have access to sensitive/vital information while doing said service.
• Allowing an employee access to secret or proprietary info in the course of their job.

NDAs can be required to new employees or when companies are working on a merger or business deal with where the other business will have access to vital information. Most business will have secret material that needs to be protected, no matter if it’s software or recipes, there’s some stuff they won’t want out.

Such an agreement, drawn up with help from your attorney, will include:

• What material needs to be confidential.
• In what ways and when can confidential info be given out?
• Your right to seek an injunction if the party violates the NDA.
• How, in the event of a dispute, the dispute will be handled.
• A time frame including when the agreement starts and how long until it ends. Until the agreement ends, the recipient is obligated to keep your information secret.

The party receiving the NDA signs the agreement and is therefore bound by the contractual obligation not to disclose your information.

Many new businesses, particularly in planning/development are very careful about making anyone associated with the company sign a NDA.

An NDA can be very important in your ability to maintain property rights. Inventors have been hurt by showing off an idea to someone, only to have them take the idea.