Confidential information and confidentiality agreements

Much of the information you'll want to know about a business you are hoping to buy will be confidential, while some will be publicly available.

Information such as employee and customer records, for example, will be protected under the General Data Protection Regulation (GDPR) and the Data Protection Act 2018, while other details will just be commercially sensitive. See UK General Data Protection Regulation (UK GDPR).

If a vendor is keen to sell then they should co-operate fully and give you all of the information you need to arrive at an offer. This may include looking at bank loan details, property rental contracts and intellectual property licences, for example.

Confidentiality agreement

It is likely you will be asked to sign a confidentiality agreement (see non-disclosure agreements). This protects the existing business owner and stops you from using any information you have learned about the way the business is run should negotiations breakdown.

You should seek professional advice by getting a solicitor or lawyer to read anything you are asked to sign or check carefully for any clauses that could have a negative impact on any other businesses you own or are considering starting. You may already be looking at developing a product similar to one offered by the business, for example, and the confidentiality agreement may prevent you doing this if the deal falls through. See choose a solicitor for your business.

Once a business has been purchased it is important to respect the Data Protection Act for any information transferred to you under the sale, such as employee records and client information. It is wise to seek expert legal advice or speak to the Information Commissioner's Office (ICO) to ensure you operate within the law. Follow the ICO's guidance on information and data protection for organisations.