Non-disclosure agreements (NDAs) are a very common type of contract used by businesses around the world. They are an effective way to protect a wide range of your business’ proprietary information to help ensure that your work isn’t used by competitors or anyone else. Sadly, many people fail to understand when an NDA should be used until it is too late. Read through the following four situations to get a better understanding of the different reasons why a company would want to use these important contracts.
Looking for Buyers or Investors
One of the most common times that a non-disclosure agreement is needed is when you are looking to bring in investors or when you’re looking to sell your business. Investors and buyers need to know detailed information about the company in order to properly determine its value. You don’t want to show them all of your confidential information only to have them turn around and start their own competing business rather than buying or investing in yours. To prevent this, you can have all interested parties sign an NDA to ensure that your information is protected.
Working with Trade Secrets
If your employees work with trade secrets such as formulas, logos, computer code, designs, or anything similar, you need to make sure that they don’t attempt to take that information with them should they begin working for a competitor. By having employees sign an NDA, you make it illegal for them to try to use or distribute the information they gained while working for you.
Ensure Contractors Keep Information Confidential
Most businesses today rely on contractors and vendors to complete work and perform tasks that are essential to daily operations. While completing their work, it is not uncommon for them to either work with, or be exposed to, certain information that a company would rather not be made public. Requiring all contractors to sign a non-disclosure agreement is an effective way to protect your business.
Protect a Custom Business Website Design
If you are having someone design something specifically for your business, such as a website, you want to make sure that it doesn’t show up in other places. Web designers can take one web design and reuse it many times for simplicity and efficiency. When you have a custom design made, however, you want to make sure that it won’t show up all over the internet! Having the designer sign an NDA will help ensure that your site retains its unique design in the future.
Creating a Custom Non-Disclosure Agreement
When you need a non-disclosure agreement for your business, it is important to ensure that you have one that is custom made to address your specific needs. Generic NDAs may seem like a simple and cheap solution, but they are not nearly as enforceable should that become necessary in court. Contact Carla D. Aikens to have a custom non-disclosure agreement written up that will meet your exact requirements. We serve both Michigan and Illinois businesses.
Carla D. Aikens, P.L.C.
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