Non-Disclosure Agreement 101: 3 Essential Tips to Use an NDA to Protect Your Business
- ipgenn
- Nov 21
- 5 min read
Most people don’t realise this: in business, nobody is naturally obligated to protect your confidential information. Not your manufacturer. Not your supplier. Not your new business partner. Not even your employee.
Unless you create the obligation (or in some circumstances implied by law), there is no obligation.
That is why experienced entrepreneurs always ask:
“Have you signed an NDA?”
What Exactly Is an NDA?
A Non-Disclosure Agreement (NDA), also called a Confidentiality Agreement, is a written promise not to disclose, share or misuse confidential information.
Think of it as a legally enforceable “please don’t leak my secrets” contract.
How Does a Non-Disclosure Agreement (NDA) Protect Your Business?
An Non-Disclosure Agreement (NDA) protects the business information that you wish to keep private, such as:
Trade secrets (formula, process, recipe, algorithm)
Business ideas you haven’t launched
Product designs or prototypes
OEM manufacturing details
Customer lists and pricing structures
Marketing strategies or negotiation terms
Financial data or business models
If revealing the information can harm your business, cover it with NDA.
When Should You Use an NDA?
You should use an NDA whenever you share sensitive information with:
Manufacturers / OEM partners, e.g., you give them your design or formula, and you don’t want it leaked to competitors
Suppliers and service providers, e.g., cost price, material sources, internal processes
Employees and freelancers, e.g., access to client data, systems, passwords
Potential investors or business partners, e.g., you’re pitching your idea or showing financials
Agencies and contractors, e.g., digital marketing, app developers
The rule is simple, if you need someone to know your secret, make sure they legally promise not to reveal it.
What Are the Laws Governing NDA in Malaysia?
In Malaysia, there is no specific statute or Act that governs how NDAs work or what they must contain.
Instead, NDAs are governed under general contract law — meaning they must be properly drafted and signed to be enforceable.
Can Personal Data Protection Act 2010 (PDPA) Covers Confidential Information?
The PDPA can only protect an individual’s personal data from being collected, used, shared, or stored without proper consent and safeguards. It requires businesses to handle personal data responsibly through clear notices, limited use, secure protection, accurate records, and allowing individuals to access and correct their data.
It can’t cover commercial confidential information such as trade secrets, business ideas, cost prices, manufacturing information, algorithms, internal strategies and many more.
That is why relying on PDPA alone is risky.
Without a Written NDA, Your Case Is Weak
If someone leaks your secret and you have no NDA, your options become limited.
It becomes difficult to prove:
What information was confidential
Whether the other party knew it was confidential
Whether there was a legal obligation to keep it secret
Whether they committed a breach of confidentiality
With a written NDA, everything becomes clear and enforceable.
How to Use NDAs in Business: 3 Essential Tips
Using an NDA is not just about getting someone to “sign a form.”
To truly protect your business, you need to know how to use the Non-Disclosure Agreement strategically. Many entrepreneurs treat an NDA as a simple document, but in reality, it can be a powerful shield for your trade secrets — if you use it correctly.
Here are the 3 essential tips every business owner, startup founder, and inventor should follow to get the full benefit of an NDA.
Tip 1: Identify What You Need to Protect in Your Business
Before using an NDA, you must know what counts as your confidential information or trade secret.
Most entrepreneurs jump straight into “sign an NDA” without first understanding what they are protecting. But this step matters the most, because your NDA is only as strong as the information you define inside it.
What Information Should You Protect?
A lot more qualifies as confidential information than people think. It’s not just formulas or secret recipes — any valuable, non-public information can be protected.
Common examples of confidential information include:
Manufacturing methods and workflow
Cost structure, profit margin, supplier pricing
Customer and client lists
Technical drawings or design specifications
Pricing models and internal calculations
Prototypes, sketches, product drafts
Business strategies, marketing plans
Software code, algorithms, or data sets
Supplier lists and sourcing secrets
Negotiation terms, proposals, internal notes
If leaking the information would help your competitor or hurt your business — it should go into your NDA.
How to Clearly Define Confidential Information in Your NDA
After identifying what needs protection, define it in the NDA in simple, clear terms. For example:
“Confidential Information includes any non-public information relating to the Disclosing Party’s technology, design, process, manufacturing method, pricing strategy, customer list, prototypes, financial data, and any other information shared for the Purpose.”
You must make it clear enough so nobody can argue that “I didn’t know this was confidential.”
Courts in Malaysia look at whether the information has “the quality of confidence.” If your NDA is vague or unclear, it becomes harder to prove a breach of confidentiality later.
Tip 2: Get the NDA Signed Before You Share Anything
A Non-Disclosure Agreement only protects you after it is signed — not before.
Many entrepreneurs make the mistake of sharing their idea first and “sorting out the paperwork later.” But legally, confidentiality obligations only begin once the agreement is in place. Anything shared earlier may not be protected.
To avoid this risk, follow these four simple steps:
Send the NDA before the meeting
Give the other party enough time to read it. Don’t wait until the end of the discussion.
Use clear, readable wording
An NDA doesn’t need to sound like a 20-page legal textbook. Plain English increases compliance and understanding.
Make sure the NDA covers both written and verbal information
Many business discussions happen verbally. Your NDA should state that verbal disclosures are also confidential.
Always sign first, then disclose — never the other way around
Once you reveal a secret without protection, you may lose the ability to claim a breach of confidentiality.
If confidential information is leaked before the NDA is signed, you cannot “un-leak” it. The damage may already be done, and legal remedies become much harder to prove in court.
Tip 3: Make Sure the NDA Covers Your Real Concerns
A good NDA does more than simply say “keep this confidential.”
Because NDAs look common, many people assume they are all standard. But the truth is — no agreement is standard. Every business has different risks, so your NDA should reflect what matters most to you.
Remember: you’re allowed to be flexible and creative, as long as the agreement clearly protects your concerns.
A well-drafted Non-Disclosure Agreement or Confidentiality Agreement usually includes:
Definition of Confidential Information
So both parties know exactly what is protected (trade secret, pricing, drawings, prototypes, etc.)
Purpose of Disclosure
Limits how your information can be used, only for evaluation, collaboration, quotation, etc.
No Copying or Sharing
They cannot reveal, leak, forward, or send your information to others.
Duration of Confidentiality
Some NDAs last for 2–5 years; trade secrets may be protected indefinitely.
Return or Destruction of Documents
The receiving party must return or delete all confidential materials when the relationship ends.
Non-Compete (Optional)
Prevents them from using your confidential information to compete against you.
Non-Solicitation (Optional)
Stops them from poaching your staff, partners, or customers.
Remedies for Breach
Explains what happens if they leak your information — damages, injunctions, legal action.
Need Help Drafting or Reviewing an NDA?
A well-written Non-Disclosure Agreement can be the difference between protecting your trade secret — or losing it forever. If you want an NDA that is clear, enforceable, and tailored to your business needs, we’re here to help.
Contact us to draft or review your NDA professionally, so you can share your ideas with confidence and protect your business from day one.
Written by,
Registered Trademark, Patent and Design Agent
LL.B (HONS), CLP
Advocate & Solicitor
Disclaimer: The above information is merely for general sharing and does not constitute any legal advice. Readers are advised to seek individual advice from the professionals.
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