Buyer Non-Disclosure Non Compete And Confidentiality Agreement: Fill & Download for Free

Legally required:Pay your taxesIncome tax: Understand the tax effects of allocation of purchase price, plus ordinary income, capital gains, tax free reorganizations, etc.Bulk sale doctrineAcquire the legal right to sell your business: (a) provide proof of ownership, (b) obtain valid consent from shareholders/partners/LLC members in company resolutions, documents or agreements.Obtain third party approval (e.g., landlord, clients, vendors, etc.)Advise government, officials or agencies (if necessary)Here’s what is not legally required, but very smart and common to implement:Advise your insurance agent, accountant, lawyer, banker, professionalsNegotiate the terms of purchase in the form of a letter of intent or term sheet.Due DiligenceDocument the TransactionClose the F*ing Deal (and most importantly, get paid)Let’s review from the perspective of the seller (“you”):Negotiate Terms of PurchaseYou should prepare your business for sale and get an idea of the fair market valuation of the company, what the terms of sale will look like, and how you want to go about selling the company. You can list it with a broker or use some other form of advertisement to communicate to potential buyers that it is for sale. Interested buyers and brokers will want to discuss a variety of terms that will eventually be a part of any sales transaction. Here are some of the terms you will have to consider:Purchase price. You can anticipate that potential buyers will want to negotiate a lower price from the price at which you advertise your business. Keep in mind that negotiated items can affect the purchase price, so if you have a hold-back account or earn out, this can lower the purchase price. The asking price should be flexible enough to accommodate a healthy negotiation process. Having an independent business appraisal will give credibility to and context to your asking price.Terms of financing and interest. The purchase price can be paid in a lump sum cash payment or it can be stretched out over time. Often small business owners have to finance a portion of the purchase price. Financing the purchase price typically requires a promissory note along with some form of security agreement with collateral pledged against the future payment of the note. The state you are in may regulate the amount of interest you can charge.Representations and warranties. Both the buyer and the seller will want to make certain representations and warranties to each other. A representation is a true and accurate statement of facts and a warranty is a promise that the facts as presented are true. For example, the seller will represent and warrant that he or she is the legal owner of the business and is authorized to sell it. The buyer will represent and warrant that he or she is authorized to enter into the transaction and that the agreement is enforceable. Sometimes sellers or buyers will try to represent and warrant future promises or facts, but those are not representations or warranties. Those are called “covenants” or promises.Lease. If you have a lease on office space, your buyer will probably want to take over the lease. This can be done through a sub-lease arrangement or by negotiating a new lease with the landlord.Negotiate LOI or Term Sheet. After you have gone through the process of negotiating the basic terms of selling your business, the seller and the buyer will sign a document that briefly outlines those terms. This is called a “letter of intent.” It is usually a non-binding binding contract but not always. For example, you could ask for a Good Faith Deposit (an enforceable covenant) or a confidentiality clause. This helps to keep track of what has already been negotiated. This document makes it easier to produce the final purchase agreement.NDA/Confidentiality. Unless and until a final definitive agreement is signed, there is nothing to prevent the potential buyer from raiding your company secrets. To prevent a potential competitor from stealing your trade secrets, it’s important that you take reasonable steps to keep your secrets protected: By either having them sign an non-disclosure agreement (“NDA”) or confidentiality agreement or giving them only the general nature of your trade secrets or confidential information. However, finances will usually need to be disclosed so you should almost always get an NDA signed that will protect your disclosures.Due DiligenceOnce you have a bona fide buyer who has signed a confidentiality agreement and a letter of intent (or term sheet), they will want some time to inspect your business to make sure everything you have represented checks out. This is called the due diligence period and it gives the buyer the opportunity to inspect the physical and economic state of your business including the building, equipment, inventory, and employees, as well as the financial records, agreements, and company books. In order to ensure a smooth transition for the new buyer, you want to make sure that you disclose everything up front. The following is a list of items you should be prepared to make available to a serious buyer:Company books which include corporate records of organization, meeting minutes, company resolutions, ownership certificates, certificates of good standing, and records of company structureFinancial records and tax returns including profit and loss statements, and balances sheetsMaterial contracts with vendors, suppliers, clients, customers, distributors or any other ongoing business relationship that is a critical part of your businessAccounts receivable reports that detail the future payments the company expects to receive from transactions that have closed prior to the sale of the businessValuation report prepared by a CPA or business appraiser that justifies your offer for the business and gives context to the buyer for understanding how the price was determined.In addition to inspecting records and physical facilities of your business, a prudent buyer will want to contact business partners who have experience doing business with you. This might include speaking with vendors, customers, distributors, or other business partners to assess the strength of the various business relationships. If there are skeletons in the closet of your business it is a good idea to deal with them in a straightforward and honest manner. The more information the buyer has about potential problems the better equipped they will be to handle those problems after you close the transaction.Document the TransactionThe sale agreement is usually called a “Purchase Agreement” or “Purchase and Sale Agreement.” This is the primary legal document used for the acquisition of a business. The purchase agreement outlines all of the details of the sale and mirrors the letter of intent or term sheet. Depending on how you structure this transaction you may also need a bill of sale, promissory note, security agreement, stock transfer certificate, and company resolutions. The purchase agreement should include all of the following:the parties (who is the buyer/seller and the business)whether this is a sale of business assets or an entity salethe purchase price and method of paymentearn out, seller financing or lump sum saleactions that the buyer and seller must take prior to closingthe closing daterepresentations and warranties of the buyerrepresentations and warranties of the sellerindemnificationcovenants (e.g., non-compete and confidentiality)default provisions for sales involving seller financingboilerplate legal provisionsexhibits of other relevant documents such as bill of sale and promissory note.Close the F*ing DealOften times sellers are in a rush to get the sale through and buyers want to take their time. As a seller, you should be diligent but firm. Keep a realistic closing date in mind but at the same time DON’T DELAY. Any delay could result in the buyer walking away. A new competitor enters the market? Your building blows up? Have a bad quarter and need to release those results to the buyer? Something weird happens to the business at the 11th hour? This happens ALL THE TIME!! So, without trying to instill a level of too much panic and adrenaline into your system, you should proceed diligently as time is of the essence. The only time you should relax is when the deal is inked (or docusigned), the check clears and you are past any point in time when a rep or warranty could come back to haunt you. That’s when you celebrate.

There are many people who have money to invest, time to contribute to a business and lot of enthusiasm. However, what they lack is a good idea on which his business can leverage.There are another set of people, who has the ability to think out of the box, have a lot of business ideas.. some are innovative ones.. some are improvements to existing ones.. what they dont have is the required capital, time to invest (as they may be already employed), and sometimes lack of eagerness or competency to take an idea forward.It is very important that both these people meet and exchange their expertise to have a viable start up. However, the problem starts when either party has issues with trusting the other. One party believes that mere idea has no value while the other party doesn't want to trust an investor/collaborator on his words.So what to do in such case?It is best that the person having a good idea secure his concept or design before moving into sharing with other parties. Having his ideas secured, he can freely discuss with multiple collaborators without the fear of being cheated. While on the other hand, the receiving party would also know that it is a fair deal to have such documents in place and the inventor is serious with his business ideas.[Image source[1] ]There are two ways to ensure this:File your own Provisional patent applicationProvisional application is a means to establish an early effective filing date for a later to be filed complete patent specification. It also allows you to use the term “Patent Pending” to be applied in connection with the description of the invention.Provisional Patent application is rather easy to be filed. It needs to include a description of what has been invented (the idea). It may not be required to give all detail or drawings. The best part is that it does not require to have a set of Claims (which are supposingly the most complex part of a patent and requires a patent agent’s help). Once a provisional application has been filed, the inventor secures the priority on his own name that no one else can revoke. He may now take this “Patent Pending” description of the invention to multiple collaborators without the fear of having his idea stolen. A receiver may always say that an idea has no value. However once a patent is granted, without even a business in place, it itself is a document to prove value in real currency. A business on the other hand may or may not have a value depending on its performance in the market.P.S. make sure you complete the complete patent filing within stipulated time. Provisional application is only valid for 12 months.Execute a Non Disclosure Agreement with the collaboratorBefore going into any discussion relating to disclosure of your application, you may enter into an agreement popularly known as NDA (Non disclosure agreement) or CDA (Confidentiality Agreement). You may find a sample draft of such agreement over the Internet. Make sure it is according to the laws in your country. This agreement will protect you to secure your priority, should you find that your idea has been misused. Do remember to add a copy of the description of your invention as an Annexure as well as a brief in the body of the agreement itself.However, in most cases, the receiving party would not be keen to sign the agreement (for obvious reasons). Dont be desperate to work with such collaborators. If your idea, you believe is good, it will surely have buyers.. if not now, there will be people to grab it with more value once you get a granted patent.I would personally prefer the former than to later.Bhaskar DuttaFootnotes[1] Caveman - Time to Change - Shep Hyken

In California, Yes. There is no confidentiality of offers, in fact, the current Residential Purchase Agreement published by the California Association of Realtors specifically states so. To ensure confidentiality, a non-disclosure agreement must be agreed to prior to submitting the offer.However, why would the listing agent want to reveal your name to other listing agents? For what purpose?I frequently negotiate multiple offer situations, both as a seller’s (listing) agent and as a buyer’s agent:As a seller’s agent, it can be a negotiating tactic to let the buyers’ agents know that a competing offer(s) is in-hand and, maybe, reveal some of the details in order to get them to outbid the offer. What is revealed, if anything, and how it’s done, must be played carefully. Revealing a competing buyer’s name is one thing that I would not disclose.As a buyer’s agent, I want to keep the details my client’s offer secret from everyone but the seller’s agent.