• 06 Aug, 2026
  • Guides
  • IP Sewa Admin
  • 7 min read

A non-disclosure agreement (NDA) is a contract that legally binds someone to keep your confidential information secret. For a Nepali startup it protects the assets registration can't reach — your source code, algorithms, customer lists, recipes, financials and unfiled ideas — because Nepal has no standalone trade-secret law, so confidentiality is enforced through contract under the Muluki Civil Code 2074 (2017). Used before you share anything sensitive, an NDA is your first and cheapest line of defence.

Key Takeaways

  • An NDA is a contract that binds a person or company to keep your confidential information secret and use it only for an agreed purpose.
  • Nepal has no dedicated trade-secret statute, so NDAs are enforced as contracts under the Muluki Civil Code 2074 (2017).
  • Use an NDA before sharing anything sensitive with investors, employees, freelancers, co-founders or manufacturers.
  • A one-way NDA protects one party's information; a mutual NDA protects both — pick by who is disclosing.
  • An NDA protects secrecy, not ownership — pair it with trademark, patent or copyright where those apply.
  • Sign it before disclosure: once information is public, an NDA can no longer make it secret again.
An NDA protects confidential business information such as source code, customer data, financials and unfiled ideasA grid of the information an NDA typically protects: source code and algorithms, customer and supplier lists, financials and strategy, and unfiled ideas and prototypes.Source code & algorithmsthe tech behind the productCustomer & supplier listsrelationships and pricingFinancials & strategyplans, models, roadmapsUnfiled ideas & prototypesbefore a patent or launch
The confidential assets an NDA protects — the ones registration alone cannot cover.

What is an NDA, and what does it do?

An NDA — also called a confidentiality agreement — is a legally binding contract in which one party promises to keep another's confidential information secret and to use it only for a defined purpose. It creates an enforceable obligation: if the receiving party leaks or misuses the information, they are in breach of contract and you can seek remedies. In Nepal, because there is no separate trade-secret law, this contractual route is the primary way to protect confidential business information. Read our companion guide on how to protect trade secrets in Nepal.

Are NDAs legally enforceable in Nepal?

Yes — an NDA is enforced as a contract under the Muluki Civil Code 2074 (2017), which governs agreements in Nepal, so a validly formed NDA with lawful terms binds the parties. To be enforceable it needs the essentials of any contract: capable parties, free consent, a lawful object and clear terms. Courts will not enforce terms that are unreasonable or contrary to law, so an overbroad or perpetual restraint may be read down. Keep the scope, purpose and duration reasonable, and the agreement holds.

One-way vs mutual NDAs

Choose the type by who is sharing information. A one-way (unilateral) NDA protects information flowing from one party only — for example, you disclosing your product to a potential vendor. A mutual (bilateral) NDA protects both sides and suits situations where each will share secrets, such as two startups exploring a partnership or a co-founder discussion. When in doubt, a mutual NDA is the safer default because it protects you whichever direction the sensitive information flows.

A one-way NDA protects one party's information; a mutual NDA protects both partiesTwo panels: a one-way NDA with information flowing from discloser to recipient, and a mutual NDA with information protected in both directions.One-way NDAYouThemone directionMutual NDAYouThemboth directions
Pick a one-way NDA when only you disclose; a mutual NDA when both sides share secrets.

What should an NDA include?

A strong NDA is specific, not a generic template pasted from the internet. At a minimum it should define these clearly, because vague terms are the main reason NDAs fail to protect:

  • The parties — the exact legal names of who is bound.
  • Definition of confidential information — what is covered, ideally with examples, and what is marked confidential.
  • Purpose — the specific reason the information is shared, so it can't be used for anything else.
  • Obligations — to keep it secret, not copy it, and limit access to those who need it.
  • Exclusions — information already public, independently developed, or lawfully obtained elsewhere.
  • Duration — how long the obligation lasts, both during and after the relationship.
  • Return or destruction — what happens to the information when the deal ends.
  • Remedies and governing law — the consequences of breach and that Nepali law applies.
Core NDA clauses: definition of confidential information, purpose, obligations, exclusions, duration and remediesSix building blocks of an enforceable NDA — what is confidential, the permitted purpose, the recipient's obligations, the exclusions, how long it lasts, and the remedies for breach.Definitionwhat's confidentialPurposewhy it's sharedObligationskeep it secretExclusionswhat's not coveredDurationhow long it lastsRemediesbreach consequences
The six clauses that make an NDA actually enforceable in Nepal.

When should a startup use an NDA?

Use an NDA whenever you must share something valuable and secret with someone outside your trust circle. Common moments for a Nepali startup include:

  • Hiring employees and freelancers who will see code, data or processes.
  • Talking to manufacturers or suppliers about a product before launch.
  • Bringing on co-founders or advisors who learn the full plan.
  • Outsourcing development to an agency or contractor.
  • Exploring partnerships where both sides exchange sensitive details.

One important exception: professional investors and many venture funds often decline to sign NDAs at the pitch stage. Don't let that stop you — share the vision and traction, and hold back the deepest technical secrets until later diligence.

What an NDA does not do

An NDA protects secrecy, not ownership — and confusing the two is a costly mistake. It stops someone disclosing your information, but it does not give you a trademark, a patent, or copyright, and it cannot make public information secret again. So an NDA is one layer in a stack: use a trademark to own your brand, a patent for a novel invention, copyright for creative works, and an NDA to guard what must stay confidential. See how the registrable rights fit together in trademark vs copyright vs patent vs design, and the wider plan in how to protect intellectual property in Nepal.

Common NDA mistakes

  • Signing it after disclosure. Once information is out, an NDA can't reclaim its secrecy — sign first.
  • Vague definitions. "All confidential information" with no detail is hard to enforce; be specific.
  • Unreasonable scope or duration. A perpetual, worldwide restraint on everything may be read down by a court.
  • No purpose clause. Without it, the recipient can argue they were free to use the information.
  • Relying on an NDA alone. For a brand or invention, register the right too — see protecting a tech startup's brand and IP.

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Protect the secrets, then own the brand

An NDA guards what's confidential — but your brand still needs registering to be yours. Once you're ready to make the name and logo legally yours, register your trademark with our team, or talk to an IP expert about the right mix of NDA, trademark, patent and copyright for your startup. Check your brand name is free first with the Conflict Checker.

#startup#nda#confidentiality#trade secrets
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