Can multiple parties sign a single NDA with another party, or do we need several NDAs?

Asked over 1 year ago - Carlsbad, CA

I'm part of a group of 8 people who are about to form a company. We have a meeting set up to talk with a potential investor, and we may be disclosing sensitive information to the investor. I figure, then, that we need an NDA before discussions start.

My question: do each of the 8 of us need to sign a separate NDA with this investor? Or can we just have one NDA that covers all 8 people in the group and the information they'd disclose?

Attorney answers (4)

  1. Edward Zaryl Kotkin

    Pro

    Contributor Level 11

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    Answered . The investor is the important party who executes the NDA. An authorized representative of the company can execute the document, acknowledging its receipt, and the company's reliance upon the NDA. Most NDAs are poorly drafted. Be careful.

    Each of the eight of you should also be executing a PIIA (proprietary inventions and information agreement) with the company. Your failure to take this important step toward prudent management of the company's intellectual property could have dire consequences.

    Hire legal counsel immediately. You can pay a relatively small amount now, and avoid paying a huge amount later.

    When I respond to a question posted on Avvo, I provide information for a general purpose. In reviewing my answer,... more
  2. Frank Wei-Hong Chen

    Contributor Level 20

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    Answered . Yes, you only need one Non-Disclosure Agreement signed by all 9 of you. My biggest concern, though, is whether or not the NDA is adequate to protect the sensitive information.

    Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is... more
  3. Michael Charles Doland

    Contributor Level 20

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    Answered . I agree with my colleagues. You only need one, but a good one. Boilerplate NDAs are particularly horrible in terms of "off the shelf" documentation because they just cannot predict the consequences of facts that an interview with an attorney would uncover, and thus deal with. The legal versus the psychological benefits are a different issue.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more
  4. Evelyn Susan Ginossi

    Contributor Level 9

    4

    Lawyers agree

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    Answered . If you haven't yet formed a company and issued membership interests to each of the 8 people, then yes, all 8 people can sign the same document as the disclosing party. However, note that many potential investors will push back or negotiate the NDA, as the document may make it difficult to seek out investment opportunities in the future, particularly if the subject opportunity is defined in very broad terms.

    With the above in mind, wise to coordinate with an attorney on drafting and signing an NDA so that you don't make a costly misstep.

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