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Q.Why is a confidentiality agreement so important if i'm selling a business?
A.If you are selling a business, a confidentiality agreement is a must. If it becomes known that your business is for sale it can weaken your present business relationships, including those with your employees, customers, vendors, competitors, and creditors. Weakened relationships can quickly destroy a company's position and in turn make it less valuable. To keep a potential business sale confidential, requires all potential buyers to sign a confidentiality agreement, otherwise known as a non-disclosure agreement (NDA). A selling business owner should only disclose a limited amount of information before determining if the potential buyer is legitimate, serious, and a capable of completing the contemplated transaction. If that is the case, a confidentiality agreement should be executed before sensitive financial information and things like your customer and vendor lists are turned over.
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