Digital Documents FAQ
How is all the paperwork completed online?
Once a match has been made, users have the option to create, edit, and sign template non-disclosure agreements and letters of intent digitally.
Depending on the document type, a given user can customize the digital document to fit their situation. Meaning, a user can make original edits and tailor the document to their terms prior to sending it to the other party. Once sent, the receiver will be notified and has the opportunity to review it. If the receiver doesn’t agree with the terms, they can request the sender makes the appropriate adjustments. This is a process of negotiation- so there may be several drafts. Once the receiver agrees with the terms, however, the document can be signed digitally. Once the receiver signs it, all previously editable sections lock in and the sender is notified of the other party’s signing. The sender can now sign it and the document is saved and posted to the match’s conversation and a PDF becomes available to be downloaded and printed if desired.
Does signing documents online hold legal merit?
Yes, a signed document (digital or not) is valuable proof that a given agreement exists and that all parties involved have a full understanding of and have agreed to the same terms. Without such documents, it can be difficult to determine exactly which conditions were actually agreed upon in the event of a dispute.
What is a Non-Disclosure Agreement (NDA)?
A Non-Disclosure Agreement (NDA) is a legal contract between two or more parties that highlights a set of confidential material or information that the respective parties wish to share but wish to restrict to the outside world (parties not included in the agreement).
In the situation of a business ownership transition, signing an NDA can be beneficial. An NDA protects the seller against anyone using the company’s sensitive information on pricing, strategy, employee data, projections, etc. to their advantage. An NDA gives the seller a level of comfort that if the opposing party violates the agreement, the seller is entitled to seek relief for lost profits or any potential harm suffered by the business.
How does the digital Non-Disclosure Agreement (NDA) on Tresle work?
NDAs help protect sellers against violations of privacy and confidentiality. Below are the high level steps for successfully completing a digital NDA on Tresle:
- Seller clicks on the paper icon within the match conversation and selects ‘Non-Disclosure Agreement’.
- Seller fills out highlighted areas & clicks ‘Create’ button. Optional: additional notes
- Buyer is notified that an NDA has been created.
- Buyer reviews terms, fills out highlighted areas, signs, & clicks ‘Save’.
- Once NDA is signed by the buyer, the terms of the documents can no longer be edited.
- Seller is notified that the NDA has been updated.
- Seller reviews, signs, and clicks ‘Save’.
- NDA is complete.
What is a Letter of Intent (LOI)?
A Letter of Intent (LOI) is a document that highlights the general plans of an agreement between two or more parties prior to the agreement being finalized. An LOI is not legally binding in its entirety but does include certain sections that are legally binding. As a whole, an LOI demonstrates a serious commitment to move towards a final agreement on the set out and agreed upon terms.
How does the digital Letter of Intent (LOI) on Tresle work?
LOIs help buyers set out the groundwork for an offer to buy a business. Below are the high level steps for successfully completing a digital LOI on Tresle:
- Seller clicks on the paper icon within the match conversation and selects ‘Letter of Intent’.
- Buyer fills out highlighted areas & clicks ‘Create’ button.
- Seller is notified that an LOI has been created.
- Seller reviews terms, fills out highlighted areas, signs, & clicks ‘Save’.
- Once LOI is signed by the seller, the terms of the documents can no longer be edited.
- Buyer is notified that the LOI has been updated.
- Buyer reviews, signs, and clicks ‘Save’.
- LOI is complete.
After the document is finished, it is saved to the match conversation and is accessible by clicking on ‘LOI’ icon. From here, it may be downloaded in a PDF format.
After sending a Letter of Intent (LOI) to a seller, do I have priority in buying the business?
At its core, an LOI describes intent; and both parties are only legally bound to a few high level areas. These areas include: agreed-upon closing date, transaction expenses, full access to information, and confidentiality.
With that being said, once an LOI is understood and signed by both parties, an agreed-upon exclusivity period begins which allows the prospective buyer to perform their due diligence without having to compete directly with other buyers. This period can be extended past the set expiry date by the mutual agreement of both parties.
After receiving a Letter of Intent (LOI) as seller, can I keep negotiating to other buyers?
After simply receiving an LOI, the seller may continue to entertain other prospective buyers. However, after the LOI is understood and signed by both parties an agreed-upon exclusivity period will begin to allow the prospective buyer the opportunity to perform their due diligence without having to compete with other buyers.