What Entrepreneurs Should Know About NDAs
The most important asset of a company is the information it has. Each company has proprietary information that makes it stand out from the others. For example, a company may have different processes, products and services that make it unique. Is there a reason why you shop at a specific store, or prefer one fast food restaurant over another? It’s likely to due to its proprietary information.
It’s important that companies protect this information because it helps create revenue. When someone shares this information with another company and the company steals and uses this information, it can cause financial difficulties for a company.
One way to protect this information is with a non-disclosure agreement (NDA). An NDA can protect sensitive or confidential information while allowing a company to have relationships with employees, clients and vendors. While NDAs offer many benefits, they do have limitations. Therefore, there are some things that entrepreneurs should know about NDAs so they can best use them for their businesses.
Enforcing an NDA is Tedious
An NDA does not prevent someone from using your company’s information. However, if your information is compromised, you can enforce your NDA in the court of law. The problem with this, though, is that once someone has stolen your proprietary information, the damage has been done. You can try to punish the offender in court, but the process can be time-consuming and costly.
The NDA Needs to be Customized
There are many NDA templates online, but ultimately, you need to customize the NDA to fit your needs. The verbiage from the NDA needs to accurately reflect the business’ services, products and specific needs. If the NDA is vague or ambiguous, then it can be difficult to enforce.
The NDA Needs to Have the Right Restrictions
NDAs are not a one-size-fits-all approach for running a business and protecting information. As an entrepreneur, you really need to to take the time to review your NDA and ensure that it outlines the level of restrictions that your business requires. You need to consider what information you need to share with others—such as employees and clients—and to what degree these people need to have access to your company’s data. It’s always better to have more protection than less. After all, once your company’s information has been made public, it can be shared with will thousands or even millions of people.
Learn More About Non-Disclosure Agreements
Non-disclosure agreements are used in a variety of business settings to protect confidential information. If you have concerns, these agreements offer a significant amount of protection. However, they do have their limitations and it’s important that you understand them so you know what to expect.
As an entrepreneur, you have enough to worry about, and misuse of proprietary information should not have to be a concern. Contact Orlando non-disclosure and confidentiality agreement lawyer B.F. Godfrey from Godfrey Legal. He fully understands this area of law and can help with preparation and review of these important documents. To learn more about his services, give him a call at (407) 890-0023 or fill out the online form.