Taking the Right Steps to Set Up a Nationwide Business Entity
When you want to create a business with a national market, there are a number of documents you need to put in place. See our page on the 8 documents you want to have in place when you start up nationwide business.
One of the most important of those documents is a non-disclosure (or confidentiality) agreement. Let’s take a look at what that is and how it can benefit you.
The Purpose of a Non-disclosure Agreement
A non-disclosure/confidentiality agreement typically involves a business and a third party with actual or potential access to key proprietary information. The third person may be an employee, a vendor, a customer, an investor or business partner. The key information also may take a variety of forms:
- A specific way of doing business
- A product formula (think Coca-Cola)
- A unique process
- A customer list
- A unique combination of materials
In a non-disclosure agreement, the third party agrees (and becomes contractually bound) not to disclose information about your business to unauthorized individuals or entities. It is the most common way to protect a trade secret.
The Components of a Valid Non-disclosure Agreement
To be enforceable, a non-disclosure/confidentiality agreement generally must include:
- A definition of what constitutes confidential information for purposes of the agreement
- Any items that are not considered confidential information
- The duties or obligations of the person receiving access to confidential information
- The length of time the non-disclosure/confidentiality agreement will be in effect
Note that there’s no requirement that a non-disclosure agreement be in writing. An oral agreement is enforceable, but there can often be proof issues based on differences in the recollection of what was agreed.
At MCIS Law, PLLC, in Stafford, we aggressively advocate for businesses and individuals in southeast Texas. For a confidential consultation with an experienced and knowledgeable lawyer, email us or call our office at (346) 297-0121. We accept all major credit cards.