Non-Disclosure Agreement (NDA) for a Business Sale: What It Should Include

As soon as a buyer conversation about selling your business gets serious, you'll need to share information you don't want publicly available — revenue, customer lists, prices, or plans for the company. A non-disclosure agreement, or NDA, is the document that protects you before that dialogue begins.

Short answer: You should always have a signed NDA in place before sharing accounts, customer lists or other sensitive information with a potential buyer. The agreement should, at a minimum, define what's confidential, how long confidentiality lasts, and what happens to the information if the deal doesn't go through.

When should you use an NDA?

As soon as a potential buyer asks for more than the publicly available information in your listing — for example detailed accounts, customer lists, or the company's name if the listing is anonymous — a signed NDA should be in place before you send anything further. That also applies once you're close to signing a letter of intent (LOI), where confidentiality requirements are often carried forward or tightened.

What should an NDA include?

• The parties: Who's covered by the agreement — you as seller, the buyer, and possibly the buyer's advisors who also get access to the information.
• Definition of confidential information: What exactly is covered — financial figures, customer information, business plans, technical data and anything else shared along the way.
• The recipient's obligations: That the information may only be used to assess the deal, may only be shared with a limited number of people at the buyer, and may not be used for other purposes.
• Duration: How long confidentiality lasts — often several years after the dialogue ends, regardless of whether the deal happens.
• What happens if the deal falls through: That information and any copies must be destroyed or returned if the buyer walks away.
• Purpose limitation: That the information may only be used to assess this specific deal — not in the buyer's own business or with third parties.

What can you share before and after a signed NDA?

Before an NDA is signed, stick to information that's already publicly available, or that's in your listing and possibly an anonymous teaser. Only once the NDA is signed should you share detailed accounts, customer lists, or a full Information Memorandum.

Skip starting from scratch: Use our free NDA template to download a ready-made non-disclosure agreement as PDF or Word (currently in Danish).

Who drafts the NDA?

For larger deals, it's often the buyer's lawyer who sends a draft NDA — and it's worth remembering that such a draft is typically written to protect the buyer's interests first. For a larger or more complex deal, it can be a good idea to have a lawyer review the agreement before you sign.

Is a standard NDA enough?

For smaller deals, a well-written standard template is often sufficient. The more sensitive the information being shared — or the bigger the deal — the more it argues for having the agreement customized and legally reviewed, so you're sure it actually protects you.

Frequently asked questions

Can a buyer sue me if I won't sign an NDA?

No. You're never obligated to share confidential information, and a serious buyer will understand and respect that you ask for an NDA before detailed information is shared.

What do I do if a buyer breaches the NDA?

An NDA gives you a legal basis to claim damages if a buyer breaches the agreement — but in practice this can be hard to prove and pursue. It's therefore still wise to only share the most sensitive information with buyers you genuinely assess as serious.

Do employees at the buyer also need to sign the NDA?

The agreement should explicitly state that everyone at the buyer who gets access to the information — e.g. advisors or key employees involved in due diligence — is bound by the same obligations.

Is an NDA the same as a letter of intent?

No. An NDA protects confidential information, while a letter of intent (LOI) describes the overall terms of the deal itself. The two documents are often used one after the other, but serve different purposes.

Need to share sensitive information with a potential buyer? Read about the whole sale process in 7 steps, or book a no-obligation call about the Advisory & Mediation package if you want help securing the process legally.