I just came across a really well written article about non-compete clauses, you can read it here www.saleofbusinesslawblog.com . I am a big fan of Non-compete clauses to sweeten a deal. Chances are, that if you are selling the business, it is because you are no longer going to be performing that type of work anyway. But guaranteeing it with a non-compete clause can give the other side a sense of security and can be a nice bargaining chip to help sweeten the deal.
Of course you have to be sure that you do not want to continue in the business and be sure that the amount added to price is sufficient to cover the opportunity cost involved in no longer being able to pursue an industry that you are knowledgeable about.
Often these agreements are limited to 3-5 years. This gives the buyer enough security about the short term without permanently banning the seller from the industry. Keep in mind however that non-competes vary in large degrees and that there are many specific rules you must follow in order for your non-compete to be enforceable. In Wisconsin, often times non-competes against individuals are limited to around 2 years.
Sean M. Sweeney is a shareholder at Halling & Cayo. His practice focuses on business litigation, offering flat fees for business litigation, and recovering investors losses as a result of stock broker fraud on contingent fees. Sean represents investors in FINRA Arbitrations and companies in Wisconsin, all over the United States, as well as internationally with clients in Canada, Germany, and Australia.
Email Sean: [email protected]
www.The-Securities-Lawyers.com : www.HallingCayo.com/Flatfee