Purchasing a business is an important decision and can have many impacts upon your life. As a result, it is imperative to ensure you are fully informed and this is can be achieved through due diligence. Due diligence is the process of investigating the business to ensure you are making the right decision in your purchase. Areas of investigation may include the business environment, financial statements, tax records, assets, customer base, reason for sale of business and any possible legal issues. The business you are purchasing may ask you to sign a Confidentiality Agreement. That is, an agreement which provides for any information disclosed to you to be kept private.
It is important that a lawyer looks over this agreement to ensure no unfair provisions are inserted. If you decide to purchase the business, a Contract of Sale will need to be reviewed by a lawyer. Mott and Associates can provide both these services of reviewing a Confidentiality Agreement and Contract of Sale.
A confidentiality agreement is an agreement between the parties not to release or divulge any information provided to another third party. They can be complex documents. They can have significant penalties and may be imperative to protect commercially sensitive information.
Yes. It is highly recommended. Confidentiality agreements can have significant penalties if they are breached. They can be very complex and the terms may be broad.