A buyer cannot value your business without seeing inside it. The NDA is what makes that safe. Done properly it controls who sees what, what they may do with it, and what happens when talks die. Done as a formality, it protects nothing worth protecting.
Our charges include applicable taxes. Disbursements are extra and billed at cost — itemized upfront, in writing, never hidden.
From $3,388.87 taxes included
The order matters. A one-page teaser that does not name you goes out first. The NDA is signed next. Only then does the buyer get financial statements, the customer picture, the lease and the rest. The NDA belongs before the letter of intent, not inside it, because you will show a serious buyer real numbers long before anyone writes down a price.
Define confidential information broadly enough to cover the things people forget: verbal disclosures during a site visit, the buyer's own notes and analyses, the identity of the parties, and the fact that a sale process exists at all. That last one is often the most damaging leak. Staff, customers and your bank finding out early can cost you the business before it costs you the deal.
Then name who is allowed to receive it. Real deals need the buyer's lawyer, accountant, lender and insurance broker in the file. List those categories, require each to be told the information is confidential, and make the buyer responsible for what any of them do with it. Avoid open-ended language letting the buyer share with all of its affiliates.
The use restriction does more work than the disclosure restriction. Say the information may be used only to evaluate and negotiate this transaction, and for nothing else. Most disputes are not about a buyer publishing your numbers; they are about a buyer using what it learned to compete, to approach your customers, or to hire the person it met on the tour.
Add a non-solicitation covenant with a fixed term, carved out for general job advertising the buyer did not aim at your staff, and a no-contact clause covering your customers, suppliers, landlord, franchisor and lender. Note the difference between this and a non-compete given later by you as seller: Ontario's Employment Standards Act, 2000 bans non-competes in most employment contracts, but a covenant given as part of a sale of a business can still be enforceable if it is reasonable.
Deal with the ending. On written demand the buyer returns or destroys the material and certifies it has done so. Carve out automated backups and copies its lawyers must keep, but keep those copies subject to the agreement. Set a term long enough to matter, and keep trade secrets, source code and personal information confidential without an end date.
If the buyer competes with you, an NDA alone is not enough. Stage the disclosure. Aggregate or redact pricing, margins by account and customer names in the first round, and release the raw data to a small clean team only once the purchase agreement is signed or the deal is genuinely conditional. Exchanging competitively sensitive information with a competitor also carries its own risk under the federal Competition Act, separate from anything in your NDA.
Personal information has its own rules. Ontario has no private-sector privacy statute for ordinary businesses, so the federal Personal Information Protection and Electronic Documents Act applies. It permits sharing personal information that is necessary to decide whether to proceed with a business transaction, provided there is an agreement limiting use, requiring security and requiring return or destruction if the deal dies. Health records held by a custodian are governed by Ontario's Personal Health Information Protection Act, 2004 instead.
Enforcement is real but slow. The remedy that matters is an injunction from the Ontario Superior Court of Justice, and you get it faster if the agreement acknowledges that damages would be inadequate, though that wording persuades a judge rather than binds one. Proving your loss in dollars is hard. Ontario's Limitations Act, 2002 gives you a basic two-year window from when you discover the breach. The practical protection is still sequencing: do not hand over the crown jewels to a stranger.
Usually not, because most templates only stop the buyer from telling other people. The clauses that matter in a sale process are the use restriction, the named list of permitted recipients, non-solicitation of your staff, no contact with your customers and lender, and the return-or-destroy step. A generic template also tends to run for a fixed short term, which leaves trade secrets and personal information exposed the day it expires. Have the deal NDA drafted for the deal.
One-way is fine where you are the seller and all the information flows out of your business. Make it mutual when the buyer is paying in shares, is sharing its own financial statements, or is asking for a standstill. Buyers often push for mutual as a matter of course; there is little cost to agreeing, as long as the obligations you take on are the same ones you are asking of them and not broader.
Often yes, because competitors are frequently the buyers who pay the most and close the fastest. Change the process, not the answer. Redact or aggregate the sensitive material in the early rounds, keep customer identities and account-level pricing back until the agreement is signed, restrict access to named individuals who are not in the buyer's sales function, and get advice on the competition law issues before any raw pricing data changes hands.
Set a fixed term for ordinary business information, long enough that the information has gone stale by the time it lapses. Keep three categories going indefinitely: trade secrets, source code and technical know-how, and personal information about employees and customers. Buyers usually accept that split. A buyer insisting on a short blanket term across everything is telling you something about how it plans to use the file.
Our published flat fee for mergers and acquisitions work starts at $3,388.87 with taxes included, and covers the confidentiality agreement as part of the deal file rather than as a separate bill. Disbursements such as searches and registrations are extra and billed at cost, itemized in writing before we incur them. Larger or multi-party processes are quoted in writing after a short call.
Open your file tonight — a licensed Ontario lawyer will confirm everything with you by tomorrow.