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What is a Business Plan Non-Disclosure Agreement?

A business plan Non-Disclosure Agreement (NDA) simply refers to a binding document that restricts parties from sharing or divulging particular information to third parties. It entails that anyone who signs a business plan NDA cannot share that information with anyone else.

A business plan represents the blueprint of your business enterprise. This document is meant to feature all the original ideas, research, data, actions, and systems that make up your business.

Aside from that, it serves as that internal compass for key personnel in your business and ensures that everyone understands what the business is looking to achieve, the necessary deadlines, resources, and milestones. A business plan NDA serves to ensure that your plans don’t end up in the wrong hands.

When you introduce your business plan to someone, there is a good possibility that they could utilize your ideas and concepts to fuel another business. Owing to that, an NDA will work to shield the vital details in your plan. This agreement is a legally binding contract, so if some details in your business plan are shared against your will, the NDA gives grounds to take legal action.

Why is a Business Plan Non-Disclosure Agreement Important?

There are numerous reasons why this document is considered important for business owners. Those reasons include;

  1. Safeguard information

The primary essence of this agreement is to ensure that confidential details in your business plan are not utilized by unauthorized persons. It is meant to stipulate the terms of use and the consequences of going against it. Also, note that this clause can be especially necessary when workers leave the company.

The objective of this agreement is to prevent them from using the information they obtained through their employment with your company for their benefit.

  1. Intellectual Property

In the business world, you have to understand the delicateness of intellectual properties and how they can affect the success of a business.

For new businesses or yet-to-be-established businesses, it can be difficult to register those things that make your business unique. However, you can use a business plan NDA to protect your IP, including patents, trademarks, and copyrights, from being disclosed to folks who might use it for their benefit.

Without an NDA, note that persons you don’t want to get access to your trade secrets can have access and kill your business even before it starts.

  1. Company Goal and Objective

The goals and objectives noted in a business work to provide a clear direction and purpose for the business. Goals refer to the intended outcomes, including market leadership or revenue growth, whereas objectives discuss the intended actions and metrics to measure progress.

Without an NDA, sensitive information can be leaked, and this entails loss of competitive advantage and potential income.

Who Prepares a Business Plan Non-Disclosure Agreement?

In the United States, have it in mind that a business plan Non-Disclosure Agreement (NDA) is most often prepared by a business attorney or a legal professional on behalf of the client who owns the business plan. Just as was noted above, the primary essence of this agreement is to ensure that confidential details in your business plan are not utilized by unauthorized persons.

Who Needs to Sign a Business Plan Non-Disclosure Agreement?

In the United States, you have to understand that just about anyone who has access to a business plan will have to sign a Business Plan Non-Disclosure Agreement (NDA). Most often, this encompasses intending investors, partners, employees, consultants, or just about anyone who might be privileged to take part in the business planning process.

When Should a Business Plan Non-Disclosure Agreement be Signed?

It is necessary to sign this vital agreement prior to sharing any important or confidential information with intending stakeholders, which would most often include investors, partners, workers, or consultants. According to experts, you should consider having the NDA signed at the very beginning of your business plan discussion or presentations and before you start giving off vital details.

Important Clauses That Must Be Included in a Business Plan Non-Disclosure Agreement

A comprehensive Business Plan NDA is expected to include the following important clauses:

  • Definition of Confidential Information

This is meant to explain the sort of information that is considered confidential and protected under the agreement. In most agreements, this includes a wide range of specific definitions of confidential information, although it will depend on the needs of the parties involved.

  • Obligations of the Receiving Party

This explains in vivid detail what is expected of the recipient of the confidential information, such as the need to maintain confidentiality, restrictions on disclosure and use, and the requirement to return or destroy the information after the business relationship ends.

  • Permitted Disclosures

This clause divulges situations that give room for certain confidential information to be shared. Note that this might be to legal or financial advisors, or as required by law.

  • Term and Termination

This part of the agreement stipulates the duration of the NDA and outlines the conditions under which it can be terminated, and this might be via mutual agreement or by breach of the agreement.

  • Remedies for Breach

This part of the plan will stipulate the consequences of going against the NDA, such as damages, injunctive relief, or other remedies available under the law.

  • Governing Law and Jurisdiction

This is meant to identify the applicable law and jurisdiction that will oversee any disputes that happen from the NDA.

Can You Sue If a Business Plan Non-Disclosure Agreement is Breached

Yes, you can sue if a business plan Non-Disclosure Agreement is breached. Have it in mind that when someone goes contrary to the terms of an NDA by sharing or utilizing confidential information without authorization, it is deemed a breach of contract. In this situation, you reserve the legal right to take action against the party who went contrary to the NDA.

If you choose to seek legal redress, note that you can seek damages as well as other alternatives. Nevertheless, note that the precise solutions or routes to take will depend on the terms stipulated in the NDA and the applicable laws within your jurisdiction.


At their core, the main objective of business plan non-disclosure agreements is to develop and cement relationships of trust between two or more parties. The agreements in great detail outline circumstances where at least one party is sharing confidential and proprietary information with the other.

Immediately after it is signed, a non-disclosure agreement gives room for open dialogue among the parties involved, and this guarantees a platform where information can be analyzed freely and the primary objectives of the meeting or relationship can be attained.