Can I create a NDA for an unformed/unincorporated business?

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Can I create a NDA for an unformed/unincorporated business?

My business partner and I are planning to incorporate our skin care business soon. Can we create a NDA for manufacturers with a yet to be formed company? Secondly, we have other

interests in different fields online magazine. Can we create a parent company and do a DBA for each subsidiary – one for the skin care one for the online magazine?

Asked on August 17, 2016 under Business Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Yes, you can do both these things. The NDA will clearly have to be between the other party to it and you personally (since it can't be between the other party and a business that does not exist), and so should also state that it can be assigned by you to a business, and if assigned, the NDA obligations apply to that business as well; then when you create the new business, you can assign (transfer) the contract to it.
You can create a parent company and have it have multiple DBAs, but are better off (for liability protection purposes, including liability for business debts or breach of contract) in having a main LLC which then owns subsidiary LLCs; if the subsidiaries are LLCs, then your parent LLC will have substantial protection from any debts, liability, or obligations of the subsidiaries, and each subsidiary will be insulated from the others.


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