BizByOwner

NDA Template for Business Sales

Never share your financials with a prospective buyer before they sign a Non-Disclosure Agreement. Here's exactly what your NDA must include — and where to get a properly drafted one.

Why You Need an NDA Before Anything Else

When you market your business for sale, you'll need to share sensitive information — revenue, profit margins, customer lists, supplier names — with strangers. Without a signed NDA, a buyer could walk away from the deal and use that information to:

  • Start a competing business using your trade secrets
  • Poach your key employees or customers
  • Share your financial information with your competitors
  • Use pricing information to undercut you while you still own the business

A properly drafted NDA creates legal liability for any breach and authorizes injunctive relief — meaning you can get a court to stop the breach immediately without posting a bond.

What Your Business-Sale NDA Must Include

Required
Definition of Confidential Information
Define broadly: financial statements, tax returns, customer lists, supplier names, pricing, trade secrets, and all business data shared during the sale process.
Required
Permitted Use Restriction
Buyer may only use confidential information to evaluate the acquisition — not to compete, poach customers, or share with third parties.
Required
Non-Solicitation of Employees
Buyer agrees not to solicit or hire your employees for a defined period (typically 1–2 years) after receiving confidential information.
Required
Non-Solicitation of Customers
Buyer agrees not to contact or solicit your customers for their own business during and after the evaluation period.
Required
Return or Destruction of Information
If the deal falls through, buyer must return or certify destruction of all confidential materials.
Required
Term
Typically 2–3 years. Some sellers use perpetual terms for trade secrets. Shorter terms may not provide adequate protection.
Required
Governing Law
Specify your state as the governing law. This affects enforceability — see our state guides.
Required
Remedies Clause
Include a clause that breach causes irreparable harm and authorizes injunctive relief without the need to post bond.
Required
Exclusions from Confidentiality
Standard exclusions: information already public, known by buyer independently, or required by law to disclose.
Optional
No License or Commitment
Clarify that sharing information doesn't grant any rights to IP or obligate you to complete the sale.
Optional
Standstill Provision
Prevents buyer from acquiring shares or assets without your consent during the NDA period — important for corporate sellers.

NDA Review Checklist

Before countersigning any NDA, verify these items are present:

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Get a Lawyer-Drafted NDA Now

For the strongest protection, use an attorney-drafted NDA specific to business acquisitions. LegalZoom offers affordable attorney-reviewed business sale NDAs.

Get NDA on LegalZoom →

State Law Matters

NDA enforceability varies by state. California, for example, has strict rules about what can be included. The governing law clause in your NDA should match your state. Check your state's guide →

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