Nearly every day, I have the chance to speak with entrepreneurs and business owners. I particularly enjoy speaking with entrepreneurs during the start-up phase of their business. One of the rather routine questions that comes up when I am speaking with business partners for a particular business venture is about their “secret sauce.”
The partners are particularly excited about their business venture and their business idea. They talk about their ideas frequently and have great ideas for their future. In these situations, it is especially important to have confidentiality agreements and non-disclosure agreements.
I can’t tell you how many times I have seen a business venture fall apart, the owners go their separate ways, and then one of the partners uses the information he or she learned from the other business partner in his new business venture, and creates a successful company.
The other former business partner is upset, sues the other, pays hundreds of thousands of dollars in legal fees, and the friendship is damaged forever.
Plus, they didn’t have any agreements in writing to rely upon just for this event. If they had, this never would have happened.
Therefore, I cannot stress enough, especially for start-ups and businesses in the tech industries, the need for confidentiality agreements and non-disclosure agreements. These agreements, in their simplest terms, are agreements signed among the business owners and partners in the business (although, it can be for employees and independent contractors as well) that prevents the disclosure of certain non-public proprietary information from disclosure to anyone outside of the business.
In addition to the obvious protection of disclosure of secret information of the business, it also can establish the amount of damages if disclosure is committed, as well as establish mandatory arbitration of any disputes or disagreements. This can limit possible litigation and legal fees should a disclosure and violation of this agreements occur.
I cannot stress enough the importance of confidentiality agreements and non-disclosure agreements when ensuring that your business is legally sound.
In addition to making sure your business is legally sound, having your own business attorney and trusted business legal counsel on call to guide you through the legal maze that businesses face is just as important as having the right accountant. Making this choice can often mean the difference in just paying a few thousand dollars and paying several hundred thousands of dollars in legal fees.
If you are an entrepreneur and a business owner, please call your Nashville Tennessee Business Law Attorney today to discuss your legal issue.
Give us a call at (615) 472-2482 or Click Here to Schedule a time to discuss your business or corporate law legal issue.