Business owners and entrepreneurs should know when to bring out non-disclosure agreements to protect their business ideas and interests.

While it might seem easier than ever to start your own business in Texas, there are situations that require parties to sign a non-disclosure agreement as a form of protection for a new business or business idea. If you feel you have company secrets or ideas to safeguard, you might consider having parties sign an NDA. Learn which situations call for such an agreement to do what is best for your business while maintaining and building your relationships with employees, investors and the like.

While showing potential distributors, partners or investors a business idea or creation

It is understandable that you are excited about your new business venture or invention, but be sure you take steps to protect your ideas while sharing them with others. Do not hesitate to ask potential partners, investors and distributors if they would not mind signing an NDA. Chances are they would not be opposed to signing if they are truly reputable. Anyone who does not like the idea of signing an agreement is someone whose background you should be sure to thoroughly investigate.

When accepting products or services from a company or person who has access to sensitive information

Say you have a new ice cream recipe you think will take off with the public and need to order ingredients from suppliers or need to have employees make the ice cream. This is a situation in which it is best you have your suppliers and employees sign an NDA. If not, you risk them sharing your recipe with current and potential competitors. Protect your dreams and peace of mind with the right legal measures.

If you allow employees access to secret information

If anyone working for you has or will have access to confidential or sensitive information, he or she should sign an NDA before getting to work. No matter how trustworthy or discreet employees might seem, it is better that you account for any contingency that results in employees sharing private information with the wrong person or company, even if that information is distributed accidentally. For instance, if you have to terminate an employee and he or she feels your decision was not justified, that person may not hesitate to share your business secrets with your competitors.

You have done your research on angel investors and venture capitalists

While you will not need every venture capitalist or investor interested in your business to sign an NDA, you might feel it is necessary once you have done thorough research on your product and the capitalist or investor. Know that some investors frown on the idea of signing an agreement from an entrepreneur who clearly has not done homework on the true validity of a new product or service.

Knowing when to implement an NDA in Texas is not always easy to determine. For more information on commercial and business law, consult with lawyers.