Non-disclosure agreement for startup companies in India

Non-disclosure agreement for startup companies in India

For a startup, an NDA (Non-Disclosure Agreement) is a must-have legal document. It’s not just about intellectual property, but also about safeguarding internal business models. Understanding the NDA and other aspects of it may be challenging on your part.

In this article, we have provided a comprehensive overview of NDAs for startups in India. NDAs do, however, have their limitations. If you are just starting out, you need to keep your business’s confidential information a secret. 

An NDA is what? And why is it so important to startups?

Startups possess a great deal of intellectual property, upon which the framework is built. Under an NDA, the signee is legally obligated to protect the intellectual property at any cost. Signees cannot share or use the information for their personal purposes. A breach or damage to your intellectual property is also subject to legal action.

Confidentiality agreements also have limitations. You will not be able to protect every aspect of your business with them. In other words, it will help you protect highly technical information. Such information is vital for a business to run smoothly. Your business idea can’t be retained since it isn’t confidential.

However, NDAs are quite useful for your company, especially when it is in its infancy. You can enforce them by filing a lawsuit in compliance with this legal document. Your organization will be able to maintain high levels of confidentiality by utilizing the agreements.

When does an NDA become necessary?

Occasionally, it is necessary to sign a nondisclosure agreement with the signee. Likewise, you should be able to produce an NDA that is well-formatted. Adapting the data as per the circumstances is crucial. Make sure you identify what is essential and what you want to protect. Whenever you enter into a confidentiality agreement with:

Contracting with independent contractors:

You might hire freelancers or contractors for the initial part of your business. Despite not being full-time employees, they will have access to sensitive company information. Therefore, getting an NDA signed by independent contractors or freelancers is an essential part of your startup’s success.

Partner companies:

In a joint project with vendors or other businesses, your proprietary information is of utmost value. As a result of this non-disclosure agreement, your business is protected during your regular dealings with your Business Partners.

Members of the founding group:

Founders of a company might have become rivals at some point. That’s because the NDA wasn’t signed between them. Do the right thing and don’t be like them. If a business fails or grows, the cofounders’ trust situation can change. Therefore, in that case, the first thing at stake is the Intellectual Property. By signing a bilateral or multinational NDA, the founding members are bound to not reveal crucial information outside the organization.


Your employees have a lot of access to sensitive information about your company after your cofounder. In order to protect your company’s privacy, you should use a standard employment agreement. Your rival or competitor can most effectively use this tactic when they lure them with a high salary and attempt to get information on your company.

Recruiting high-level employees:

The process of hiring a CFO, COO, or a CTO is lengthy and time-consuming. You might have to share some confidential information with them during that period. If this is the case, you should give them the NDA form and tell them about it. Perhaps they work for a competing company. This is very important.

Should You Leave the NDA Form out of the picture?

A NDA form should sometimes be kept out of the picture to avoid hurting sentiments. Although you might argue that the NDA form is a legally binding agreement to protect your business, let us clarify it for you.

  1. You have prepared a confidential pitch deck for venture capitalists. VCs are now in a quandary if they should sign an NDA or not. You should not even consider it. It immediately looks unprofessional. In order to be practical and time-efficient, they sign NDAs without going through all the clauses. Stay open-minded and don’t sign an NDA when going for the fundraising.
  2. There are some pieces of information that are confidential, and there are others that are not. The information you present needs to raise the alarm if it concerns the intellectual property. In general, you do not need the reader to sign an NDA if you share information with the public, at events or through networking.

Customized NDAs for Your Company

The last step is to create a standard NDA for your startup. An NDA can be set up in a number of ways, but we will tell you two ways you can have one.

Method 1: Select a template

An NDA template will help you navigate the process without having to start from scratch. Just change the terms and you’re good to go. Remember to check for:

  • What information to keep confidential and where not to use it are the questions you need to answer in the agreement
  • Agreement type:
  1. Unilateral : A unilateral agreement is when one party sets the terms
  2. Bilateral : There is a bilateral assignment when two parties are involved
  3. Multilateral: a situation where more than two parties are in agreement
  • What are the terms of the NDA agreement: what is its validity period, and what are the consequences if breached? It should cover everything.

Step 2: Create an NDA from scratch

A professional will help you with it, and you will get a more detailed and legal NDA form for your business. The scopes, terms, and types will be covered according to your whims and fancies, and you don’t have to think too much about it. The copy can be made as many times as the signee needs, and you are good to go.

What else is needed?

People are often confused about Notarisation of the NDA form, because it sounds legitimate but doesn’t have any foundation. The NDA does not need to be notarised. You should, however, add a stamp to it. The Non-Disclosure Agreement should be completed and produced to anyone other than the person mentioned above.

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