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Home Resources Glossary Non-Compete Agreement / Non-Competition Agreement

Glossary

Non-Compete Agreement / Non-Competition Agreement

A contract that limits the seller or key employees from competing with the business after the closing.

See Also

Key employee, non-solicitation agreement

Tips

It’s important for the seller to ask any key employees to sign a non-compete before they begin the sale process. If the seller doesn’t have the leverage to obtain a non-compete from a key employee, or if non-competes are illegal in a state, such as California, a non-solicitation agreement can be used, which prohibits employees from actively soliciting employees or customers of a business after termination.

Related Resources

Alternatives to Non-Competes with Employees

Related Terms

Net Income

Amount of money earned after deducting from the gross revenues of a business all expenses, including overhead, employee salaries and benefits, manufacturing costs, inventory costs, distribution costs, and marketing and...

Non-Binding

Having no legal or binding force. Tips Non-binding is normally used in the context of a non-binding letter of intent (LOI). Technically some clauses in the LOI are binding, such...

Non-Disclosure Agreement (NDA) / Confidentiality Agreement (CA)

A legal contract between at least two parties that outlines confidential material, knowledge, or information that both parties want to share with each other for specific purposes but with restricted...

Non-Operating Assets

Property or goods owned by a company that are not necessary to the ongoing operations of the business enterprise. Tips A seller can often dispose of non-operating assets in the...

Non-Operating Income

Income or revenue not related to the typical activities of the business. Example Income from an insurance settlement or lawsuit, or gains from selling a piece of real estate.

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