Non-disclosure agreements (NDAs) are an essential component of doing business for many entrepreneurs. The sharing of information is often necessary when hiring new employees or taking steps to find funding, but you want to rest assured that your valuable ideas are kept secure. The following are a few instances where having a valid and binding NDA is an absolute must.
No matter how strong your products or services are, you must have reliable staff to ensure your business continues to thrive. When searching for the best and brightest in your industry, an NDA offers assurances that workers won’t take important concepts and processes within them should they leave. It also makes certain that they won’t divulge information to any direct competitors, which is a real concern in certain industries. Think about the type of information an employee would have access to during a workday. Now consider what might occur if this information fell into the wrong hands.
There might also come a time when you consider selling a product or technology you’ve put a lot of work into. Without an NDA in place, potential buyers could take information disclosed during discussions and provide it to unauthorized third parties. This leaves you at a disadvantage when in negotiations and may even result in competitors using the information to get a leg up over your company.
Investors are key when it comes to expanding your enterprise, and once again, meeting with investors involves the exchange of often sensitive information. An NDA protects you and your business concepts from disclosure, especially if investment talks fall through. When creating an NDA, it’s best to have an attorney’s assistance. Even though you know your business inside and out, an attorney is necessary to ensure all clauses contained within an NDA will hold up in a court of law.