Confidentiality agreement is a contract that collects information that should not be disclosed to third parties between corporations as a confidentiality agreement.However, third parties have exceptions such as M & A advisors, lawyers and certified public accountants. While negotiating with M & A or company sale, we will negotiate until M & A or company sale is decided by concluding a confidentiality agreement and not disclose the content of negotiation. If the confidentiality agreement is not concluded with appropriate content, the trade secret will be leaked to a third party before M & A, and it will be impossible to achieve the purpose of M & A. Given the importance of trade secrets exchanged by M & A, confidentiality agreements used in M & A are more stringent than general confidentiality agreements. As a seller of M & A, we disclose precious information of the target company, but disclose highly confidential information such as settlement statement, contract with each company, salary amount of employee, etc. in the provided information Therefore, we can not disclose information unless a buyer candidate company obeys confidentiality obligations. If you violate confidentiality agreement, you will be required to seek damages or injunction.
It is also called NDA or CA in Japan
The secrecy leak in this case is not a legal penalty and is a breach of contract. And it is different from the obligation of confidentiality to keep secret that we knew in duty which is a legal obligation. The contract of confidentiality is called NDA, CA, etc in Japan. Regarding the basic contract procedure for M & A or company sale, first the buyer side and the seller side make contact. First of all, the buyer side and the seller side negotiate the terms of purchase with a confidentiality agreement. When the seller discloses the information of the target company, it concludes a secret agreement in advance. If mutual agreement is obtained under terms of acquisition, we will enter into a basic agreement, but we will disclose information on M & A and company sale when agreement is obtained at the Board of Directors. That is why this agreement will be concluded, we will get approval at the general shareholders’ meeting because we must approve of shareholders. Only then will M & A and company sale succeed. When we have advanced to this contract, we will explain to the major shareholders and get approval when the board of directors gets an agreement not to oppose at the shareholders meeting.