It doesn’t matter whether you’re a celebrity, an influencer, or a large or small company – a Non-Disclosure Agreement (NDA) is a valuable tool for every business, writes small business legal expert, Shalini Nandan-Singh.

An NDA, also known as a Confidentiality Agreement, supports businesses of every size to protect their ideas, business systems, client lists and more.

The purpose of an NDA is so the recipient of the agreement agrees not to disclose the confidential information you provide to anyone else. You may require a two-way Non-Disclosure Agreement if both parties share confidential information.

Protecting the information you share with others

You will inevitably share information about your business with others. Information could include ideas about a new business, finances, unresolved concepts, clients and customers or other sensitive information.

It’s important to remember that confidential information is information you provide in confidence and with value, not in the public domain. Sharing a new business idea with a social media group is not recommended, as it is in the public domain, where it is impossible to protect the concept with an NDA.

If there is no NDA, private and sensitive information you share can be used by the other party however they choose, including to set up a competing business, provide the information to a competitor, or share it publicly.

At the commencement of a relationship, a Non-Disclosure Agreement should be signed before any confidential information is discussed. Requesting an NDA be signed after you have shared confidential information is possible. However, it’s not an ideal scenario.

Situations when a Non-Disclosure Agreement is important

There are many scenarios where a business would benefit from having an NDA. They include times when sharing confidential information, such as:

• When sharing business ideas and concepts
• When developing business plans with business coaches
• When creating marketing plans with freelancers or agencies
• When sharing financial information
• When discussing formulas and recipes with manufacturers
• When reviewing research results with experts
• When developing software programs or websites with service providers
• When providing information about a business for sale
• Many other scenarios with ANY individual

For example, when starting a business, you may share information about your business with accountants and lawyers and include ideas and concepts that are either new, or new to you. Indeed, they are valuable ideas for your business. A Non-Disclosure Agreement should be provided and signed by the directors of these businesses to protect your ideas.

Once you’ve started your business, you may engage a marketing freelancer to help with your social media marketing. An NDA must be signed with the freelancer, as you will inevitably share confidential information to help them do their job successfully.

As your business grows, you may need to share patterns, designs or recipes with manufacturers. These service providers may all be incredibly professional. However, signing an NDA is still wise, so they cannot take your valuable resources and use them for themselves or share them with a competitor.

At the end of your business lifecycle, when you may be considering selling your business, there will be a raft of valuable, confidential information to be provided to business brokers and interested parties. All these individuals and/or business directors should sign a Non-Disclosure Agreement to protect the crucial details of your business.

Getting an NDA signed BEFORE that conversation is essential if you want to talk to someone about valuable, sensitive information regarding your business. Remember, if the NDA is supposed to stop another company from disclosing information, you will need the owner/director to sign the NDA.

What should an NDA include?

An NDA can be a straightforward contract used across many scenarios where you require confidentiality. A well-drafted Non-Disclosure Agreement can cover your business niche to clarify how you expect the confidential information you provide to be treated.

The critical question is, “What information can people disclose to others about your business?”

Businesses need to build trust, and an effective way to do that is to make clear how the relationship works and what is expected of all parties.

Creating and using a Non-Disclosure Agreement for your business does not need to be onerous. An NDA can give you the confidence to speak freely and benefit your business. Consider it an opportunity to develop professional and trusted relationships with your service providers and network.

Implementing an NDA is a practical and effective solution to protect confidential information for every business at every stage of the business lifecycle.

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Now read this:

https://www.kochiesbusinessbuilders.com.au/why-an-influencer-agreement-is-absolutely-vital-for-a-successful-partnership/