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Before You Sign… The Facts About NDAs

In the past, we have brought to your attention some concerns and questions about Non-Disclosure Agreements (NDA), also known as Confidentiality Agreements (Click Here). We have brought to light that some transitions companies use the NDA document to establish an exclusive relationship or put unethical conditions on a purchaser before allowing them to learn more about practice opportunities. It is important for you as a purchaser or buy-in candidate to understand a few things:

Confidentiality/Non-Disclosure Agreements are valid legal documents
NDAs are designed by attorneys and meant to protect sensitive financial and private business information of practice owners and sellers. It is normally required that you sign the NDA prior to reviewing practice-related documents and information in connection with a practice purchase, association, or partnership. The agreement you sign is a valid legal document. You should read it closely and understand all it entails and requires of you. If something seems to be out of the ordinary, be sure to ask about it. By signing the document, you should be agreeing that you will keep all information related to the inquiry (sensitive or not) confidential. This is reasonable. You should not be signing to anything else.

Look out for You: You are entitled to representation
Unless you’re hiring someone to specifically represent you, you must look out for yourself. While our entire team at ADS Florida takes pride in creating fair transactions with fair documentation, not all “transition specialists” operate the same way, so you must protect your interests. Look closely at all provided financial statements and documentation. Are you provided with complete financial statements and tax returns; a clean, reasonable pro forma (not projection) and a full set of statistics on the practice and how it runs? Please note that some NDAs also seek to limit your access to representation. You should never be required to relinquish your ability to engage competent advisors. While this may come at a cost to you, proper advice or representation can be invaluable.

Not all “specialists,” “experts” or “brokers” are alike
And this matters to you. Quality transition specialists and experts represent quality transition opportunities. Not only is the practice documentation clear, but it is consistent and professional. Further, documentation should be provided in a timely manner and be complete. True specialists will have collected and reviewed documentation up front to establish price or value, well before a practice is available for sale on the market. They are comprehensive and thorough and do not compromise their work or integrity.

We invite you to read and review our confidentiality agreement at any time on our website under the “Forms” section at http://www.ADSflorida.com/forms. We feel it is a clear, straightforward document, specifically intended to protect the disclosure of private information. If you are interested in representation for or review of any practice you are currently considering to purchase or buy in to, please do not hesitate to contact us at 800.262.4119 or transition@ADSflorida.com.

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