Business Sale Confidentiality Agreements | KBS Corporate

The importance of confidentiality when finding a buyer

What is a business sale confidentiality agreement?

When you sell a business, it is crucial to ensure the fewest possible number of people are aware of what is happening until the timing is right to declare it. Therefore, a confidentiality agreement binds those who are on the inside of the deal from revealing what they know. All parties involved are required to sign a non-disclosure agreement (NDA) before they are given access to any confidential information.

What should a business sale confidentiality agreement cover?

It is not only the knowledge that the business is for sale that must be protected. Confidentiality must also apply to the information about the company which prospective buyers will need to know. For example, the financial position of the business; details of employees, customers and suppliers; databases, software and technologies utilised; and strategies and plans for development, including potential new products and services.

Benefits of a business sale confidentiality agreement

Advantages of a confidentiality agreement are obvious in terms of which stakeholders you would not want to discover the company is for sale. Employees, for example, could become unsettled and concerned about job security, affecting their productivity, while suppliers might have fears about whether contracts will be honoured and thus seek alternative customers. Also, a business sale confidentiality agreement protects you against sensitive information being revealed to competitors who could use it to their advantage in the marketplace.

What is a business sale non-disclosure agreement?

An NDA is a legally drafted document that prevents parties involved within a transaction from disclosing or using the information contained therein. With KBS Corporate, the business sale NDA means you remain firmly in control of who has access to your company’s sensitive commercial information and we will seek your express authorisation before providing a prospective buyer with any confidential data.

What is protected by a business sales NDA?

Going beyond the all-encompassing description of ‘important sensitive information’ relating to the company, a business sale non-disclosure agreement ringfences any processes or technologies that might be giving the company a competitive advantage. This protects against a competitor attempting to replicate your intellectual property, which could potentially affect the value of your business.

How to ensure confidentiality in business sales

A key consideration within a business sales confidentiality agreement is to be specific, ensuring there are no grey areas. Identities of all parties bound by the agreement must be included, along with details of the information that must remain confidential, how it can be used by the recipient and the time period covered by the non-disclosure agreement. It must also state specifically to whom the interested party can legally disclose the information, e.g. their accountant or solicitor.

How KBS Corporate can help

Our processes are designed and proven to ensure maximum business sale confidentiality, with every one of our employees having been fully trained in all aspects of the required procedures – from the moment first contact is made until the day your transaction is completed. We also offer our clients and buyers the use of virtual data rooms – secure-access portals to confidentially store sensitive commercial information, allowing potential acquirers to complete due diligence in a safe and timely manner.


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