When you have valuable business secrets, you want to do anything to protect them. You may have a vendor or contractor who needs your secrets to fulfill a contract. Or you might have a new business plan that you don’t want your employees to take to another company. In these cases, you can prevent others from stealing your business secrets with a nondisclosure agreement or NDA.
A nondisclosure agreement is a legal contract that prevents those with knowledge of your business secrets from sharing them. Here are a few ways an NDA can protect your business:
- Protecting secrets from other businesses – You may look to partner with another business to increase your growth. For example, you might have an idea for making a product, but don’t have the factories to make it in. In this case, you could hire a company that does and give them your design to make the product. Signing an NDA with the company makes sure that they won’t sell your design to your competitors.
- Protecting secrets from investors – As you grow your business, you will likely need to raise money from investors. Before they give you money, they will want to know what advantages you have that will make your company profitable. In this case, having them sign an NDA prevents them from stealing your idea and taking it to another company.
- Preventing employees from leaking your ideas – If you have a brand-new idea or project that could be valuable, you may want to have the employees working on the project sign an NDA. This can help prevent them from leaking your valuable information.
Protecting business secrets can be difficult. But a properly executed NDA can help deter your employees or other businesses from sharing information valuable to your company.