When negotiating a merger or acquisition, you must reveal a lot of private information about your company to the other party. Though it is necessary to discuss your profits, losses, and procedures, you must be cautious when disclosing such information.
If you don’t protect your trade secrets and intellectual property, the other party can steal your business from you after the due diligence period. To avoid this type of unfortunate event, consider talking to a knowledgeable attorney about the importance of non-disclosure agreements in mergers and acquisitions in Georgia.
Generally, you want to keep all the valuable information about your company private. When negotiating a merger or acquisition, however, the buyer needs a comprehensive view of the company to make an informed decision on whether to purchase. So, you must disclose information to the other party that you would typically keep to yourself.
However, you don’t necessarily have to hand over all your books to the buyer. Often, business owners will hire an independent auditor or accounting firm to assess the company and give the buyer a report based on their findings. Common documents and that you might make available to this independent party include:
Of course, you should not disclose any of this information to the auditor without having them and the buyer sign an NDA beforehand. Our skilled mergers and acquisitions attorneys can help you draft strong non-disclosure agreements for all parties involved in the business deal.
If you’re selling your company, you’ll need to decide whether you want to tell your employees about the merger or acquisition. If you disclose this information too soon, you can run into issues with essential staff members worried about their job security.
High-level employees may leave to find a new job, possibly with a competitor. This can become especially problematic if the deal eventually falls through. So, it can be beneficial to have the key team members involved in the transaction sign an NDA stating they will not discuss the pending deal with other employees.
If you intend to tell your workers about the upcoming purchase, you should have essential employees sign non-disclosure and non-compete agreements to prevent them from leaving the company with your trade secrets and intellectual property. Talk to our attorneys about the types of provisions you should include in an NDA for high-level employees during a merger or acquisition.
When negotiating any business deal, you want to be cautious about the amount of information you share with the other party. You don’t want to disclose more than what they need to make an informed decision. This is incredibly important to remember in mergers and acquisitions because your entire company is on the line.
If you plan on selling your business, our legal team at Sparks Law can advise you on how to draft non-disclosure agreements in mergers and acquisitions in Georgia. Contact us today to get started.