Notices and Disclaimers to be Included in Your Business Plan

Businessinstitution.com.com is not a law firm and does not give legal advice. This section is intended to highlight areas you should review with an individual licensed to practice law in your state.

Brief Description

When you are raising capital, it’s important to pay attention to legal requirements, which vary by state. It would not be uncommon for a lender or investor to want to include your business plan as part of a contractual agreement between the parties. Because a business plan is focused on what the entrepreneurs expect to happen, certain disclaimers should be included. Consult an attorney for specific advice for your business plan in your state.

This Section of Your Business Plan Should Include:

• Confidentiality Statement
• Notice of Forward Looking Statements
• Significant Risks
• Notice that the Business Plan is Not an Offer to Sell or a Solicitation for Securities
• Other Notices and Disclaimers Advised by Your Attorney

Important Considerations

The types of disclaimers found in almost all business plans include those noted above, but this list is by no means exhaustive. You should ask your legal advisors about the need for these and any other disclaimers and notices for your state and type of business. Your legal advisors will also be able to provide you with specific language that should be used for each type of notice or disclaimer.

Confidentiality Statement. Every business plan should be marked “CONFIDENTIAL.” We recommend including your confidentiality notice in a footer on every page of your business plan.

Notice of Forward Looking Statements. Your business plan will include information about things that have already happened and things you expect to happen. Discuss with your legal advisors the appropriate language to put readers on notice that the business plan includes “forward looking statements,” or statements about things you expect to happen.

Significant Risks. Explicitly address that there are significant risks associated with the business plan. For this section, you should separate your enthusiasm for the business and focus only on managing any personal liability, by disclosing significant risks. These typically include competitive risks, risks due to the economy, failure of significant sales expectations to materialize, the health and well-being of a few key individuals, and availability of raw materials. Lenders and investors will have seen these dire warnings on dozens or even hundreds of business plans.

Not an Offer to Sell or a Solicitation for Securities. There are strict state and federal laws governing the sale of ownership (stock, equity) even in a small business. A business plan is not intended to be an offer to sell ownership; rather, it is a document designed to gain interest in the business. An offer to sell ownership in your company must be done thorough a separate document, typically a Prospectus or Private Placement Memorandum. Your disclaimers should make this clear, using the legal language required or advised in your state.

Other Notices Advised by Your Legal Advisor. Consult with your attorney on these and other notices and disclaimers required or recommended in your state, for your type of business.