Non-Disclosure Agreement in Sale of Business

The protection of confidential information and trade secrets during the sale of a company is crucial not only for the position of the target company on the market, but also for the success of the sale transaction itself. Due to the complexities of the sale process, a large amount of information is exchanged between the target company as seller and the (potential) buyers. Confidential information and trade secrets present the greatest risk, and it is in the target company’s interest that this information is disclosed gradually. On the other hand, potential buyers seek to obtain as much information as possible as early as possible in the sale process to facilitate their decision on a future purchase of the company. Therefore, it is critical for the success of the process that the par- ties strike the right balance between the amount of information disclosed and the amount of information withheld in relation to each stage of the process. In doing so, all parties should be aware of all the risks and pitfalls involved in protecting confidential information and trade secrets.

Key words: non-disclosure agreement, sale of a business, trade secret, confidential information, exchange of information, disclosure of information, protection of trade secrets, Trade Secrets Act, Directive (EU) 2016/943.