A confidentiality agreement may be used when a business is being sold in Colorado. This is done to limit how much information can get out to the public. For instance, a lot of business owners want the sale to stay a secret for as long as possible because they don't want it to be known that they're shopping the company.
So, what types of questions should be addressed in this agreement? The following are all things that usually should be answered for a business of any kind:
- What information is allowed to be disclosed, and what types of information have to remain a secret?- Is the fact that the company is for sale a secret, and does the same go for the negotiations themselves?- How long will this confidentiality agreement be binding for, and when does it expire? Is it intended to be permanently binding?- How are patents addressed under the agreement? For instance, if a potential buyer looks into the company and finds out about developments and inventions, what is he or she allowed to do with this information?- Are the Colorado state laws going to be used, or will the laws in another state take precedence? This is important when the company is in one state and the potential buyer is in another.- If there are any disputes, what state are they going to be heard in?- If the agreement is broken in any way, what options do both sides have?
All agreements have their own fine print and details, but it's wise to get the answers to all of the above in any situation, and you also want to know about any other legal options and ramifications.
Source: Colorado Association of Business Intermediaries, "The Confidentiality Agreement," accessed Sep. 15, 2015