2021, July

Non-disclosure agreements, confidentiality agreements, business protection agreements, trade secret agreements.

No matter what you call it, a non-disclosure agreement (also called an NDA) an essential part of a company's internal and external contractual structure.

There is no good reason for your business not to use an NDA, and a number of good reasons why you should have at least one NDA template in your corporate toolbox. Many companies have several Non-Disclosure Agreements – one for employees, one for outside contractors, one for suppliers, etc.

Let's discuss the top 4 reasons your business needs an NDA.

Reason #1: A Non-Disclosure Agreement protects your customer information.

You are legally responsible for securing your customers' personal information to ensure that it's not stolen or disclosed, whether accidentally or intentionally. Most countries have adopted privacy laws to protect consumers against fraud, identity theft, and invasion of privacy. A business that fails to comply with those laws can suffer serious consequences.

All employees, managers, and contractors who have access to your customer records should be required to sign a Confidentiality Agreement prohibiting any disclosure of any such information to anyone, including family members. You can choose to incorporate the confidentiality provisions into your standard employment contract, or use a separate agreement or confidentiality pledge form.

Your company should also adopt a confidentiality policy that clearly states what the employee's / contractor's obligations are and what their liability will be if they breach the confidentiality provisions. The policy statement should also be distributed to any third party consultants that the company has contracted with, who may receive or have access to confidential information in the course of performing their services.

Reason #2: A Non-Disclosure Agreement keeps your financial data safe.

A competitor could use your financial data to their advantage. So could an ex-employee. A 2014 white paper by Osterman Research revealed that "68% of information workers store work-related information in a personally managed file-sharing solution". And "89% of employees continue to have access to at least one application from their former employer now that they are working for someone else."

A 2021 article by SmallBizGenius.net quotes some alarming employee theft statistics. According to the American Bar Association, "59% of ex-employees admitted to stealing the company's sensitive information when leaving previous jobs".

While requiring your employees and contractors to sign a Non-Disclosure Agreement may not completely protect you from employee theft or fraud, it creates a contractual obligation on their part to protect and not disclose your confidential information, which will continue beyond the term of their employment with you.

Reason #3: A Non-Disclosure Agreement helps your business maintain its competitive edge.

If you have a patented process, a unique business model, a "secret formula", or a software application you've developed specifically for your business, this is a valuable trade secret that your competitors would like to get their hands on.

Trade secrets and intellectual property are some of your company's most valuable assets. If you used outside consultants (programmers, researchers, and the like) to assist in developing those trade secrets, every one of them should be bound by confidentiality agreements. Likewise everyone inside your organization who is privy to these assets should also sign an NDA.

Reason #4: A Non-Disclosure Agreement helps to preserve the value of your business.

If you're planning to sell your business, potential buyers will want all the information about your operations so they can do their due diligence. If you don't require these potential buyers to sign a confidentiality agreement before turning over that information, you run the risk of having your data stolen by someone who may just become your next competitor - with your trade secrets in their hands.

Image by Gerd Altmann from Pixabay

If you operate a small business, you already fill a lot of different roles. Should Accountant / Bookkeeper be one of them? Maybe outsourcing is an option that will work for you. Here are some pros and cons to consider when deciding whether to outsource your accounting functions vs. doing them inhouse.

I just renewed my Canadian passport.

One of the questions on the renewal form was "Are you a naturalized Canadian?" Which started me wondering about what a "naturalized Canadian" is, and what the difference is between naturalization and Canadian citizenship.

Those of us who are lucky enough to have been born and raised in Canada get to enjoy all the rights, privileges and benefits of being citizens of this wonderful and amazing country. I believe that I live in the best country in the world. And apparently so do the quarter million new immigrants who arrive in Canada each year.

What is a naturalized Canadian?

A naturalized Canadian is someone who has obtained citizenship by means other than being born in Canada or being born to or adopted by Canadian citizens. In other words, a naturalized Canadian is a person who became a permanent resident and then applied for and was granted full citizenship.

What rights does a permanent resident have (or not have)?

Permanent residents have certain rights in Canada.

• Permanent residents are eligible for health care and most other social benefits.
• They can live and work anywhere in Canada.
• They are protected by Canadian laws and the Charter of Rights and Freedoms just as any Canadian-born citizen would be.

There are rights that citizens have but permanent residents do not.

As a Canadian citizen, I have the right to vote in every federal election. Permanent residents cannot vote, and they cannot run for public office.

I would not lose my Canadian citizenship if (heaven forbid) I was convicted of a criminal offence, but if I was a permanent resident I could be deported for criminal activity. Which is not a bad thing. Too bad we can't deport a few of our more notorious Canadian-born criminals!

Permanent residents cannot hold Canadian passports. They must have a passport from their country of origin in order to travel, but they must attach official documentation showing that they have permanent resident status in order to get back into Canada after traveling abroad.

How does an immigrant to Canada become a naturalized Canadian?

1. You must be at least 18 years of age.
2. You must have lived in Canada for at least 3 years.
3. You must acquire permanent resident status.
4. You must be able to speak and understand English or French.
5. You must have an understanding of Canadian government, history, geography and what the rights and responsibilities of Canadian citizenship are.
6. You must pass the Canadian citizenship test. The federal government will supply you with a guide that you can study in preparation for the test.
7. Once you have passed the test, you are now ready to take the oath of citizenship.

Who does not qualify for Canadian citizenship?

• Anyone who has been convicted of a criminal offence or an offence under the Citizenship Act in the 3-year period prior to their citizenship application.
• Anyone who is in prison, on parole or probation, or who has been in prison, on parole or probation for a period of more than 1 year at any time in the past four years.
• Anyone who has a deportation order against them.
• Anyone who has been charged with or convicted of a war crime or a crime against humanity.
• Anyone who has had their citizenship revoked within the past 5 years.

Image by jacqueline macou from Pixabay