Can a buyer share my business information with its lender or advisers without my approval?

A buyer can share your information with the people the confidentiality agreement permits and no one else, which makes the permitted-recipient wording the first thing to read. The harder problem is rarely a stranger. It is the lender, accountant or lawyer the buyer needs to finish the deal, who may never have been discussed. Settling that early protects both sides.

Why a buyer’s lender will see your numbers

A buyer who finances a purchase has to put your business in front of a lender. BDC, for example, lists the business’s financial statements or income tax returns, the agreed purchase price and how it was determined, the transaction structure, and a letter of intent among what a purchase-loan applicant provides. An agreement that is silent on lenders leaves the question to be argued later.

What to settle in the agreement

Ask that recipients be named or described by category, such as the buyer’s lender, accountant and lawyer. Ask that each be told the information is confidential and bound to keep it so, that the buyer remain answerable for what they do with it, and that the buyer tell you before sharing with anyone outside the list. These are points to raise with your lawyer, not terms to assume are standard. The wider picture is in keeping a sale confidential.

Personal information raises a second question

Customer and employee details in a data room are personal information. The Office of the Privacy Commissioner of Canada publishes the fair information principles behind PIPEDA, which include accountability and safeguards, and takes complaints about organizations. Sharing only what the buyer needs at each stage limits what can travel.

If information has already gone further

Start with the facts. Find out who received what and when, ask the buyer in writing to identify the recipients and confirm the information has been returned or destroyed, and keep copies of what you shared. Then take the agreement to a lawyer before alleging a breach, because what you can claim depends on its terms. BDC warns that word can get out to employees, customers or suppliers when a sale is marketed through a site with weak confidentiality procedures, so decide in advance what you would tell them.