Notices and Disclaimers for Your Business Plan

Determine any legal requirements that pertain to your location and business.

Business Plan Disclaimers

SmallBusinessPlans.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.

When you are raising capital or seeking another form of 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 legal disclaimers should be included. While the types of disclaimers on this page may be helpful, you should consult an attorney for specific advice for your business plan in your state.

 List of Disclaimers for Your Business Plan

• 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
• Testimonial Disclaimer (if your business plan includes testimonials)
• Intellectual Property Disclaimer
• Other Notices and Disclaimers Advised by Your Attorney

The disclaimer examples 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. They may also provide you with an umbrella disclaimer statement, or risk disclaimer appropriate for your location and industry.

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.

Testimonial Disclaimer

A testimonial disclaimer is a statement that is included when presenting testimonials from customers or clients in advertising or promotional materials. The purpose of a testimonial disclaimer is to provide transparency and to disclose any potential biases in the testimonials that are being presented. A testimonial disclaimer may include information such as:

• The testimonial is from a real customer, but the results may not be typical.
• The testimonial is based on the customer’s individual experience and may not be representative of what other customers may experience.
• The testimonial is not a guarantee or prediction of future performance.
• The company providing the testimonial may have compensated the customer for their testimonial or provided them with an incentive to provide a testimonial.

The goal of a testimonial disclaimer is to make it clear that the testimonial is only one person’s experience and not a guarantee of future performance.

Intellectual Property Disclaimer

An intellectual property (IP) disclaimer is a statement that is used to clarify the ownership and use of any intellectual property (such as trademarks, copyrights, and patents) that is included in a document, website, or other materials. The purpose of an IP disclaimer is to protect the rights of the owner of the IP and to inform others of the terms of use for the IP.

An IP disclaimer may include information such as:

• The IP is owned by a specific individual or company and is protected by intellectual property laws.
• The IP may only be used with the permission of the owner or under the terms of a specific license agreement.
• The IP should not be used in a way that implies endorsement or sponsorship by the owner.
• The IP should not be used in a way that infringes on the rights of the owner.

The goal of an IP disclaimer is to make it clear that the owner of the IP holds specific rights to it and others should not use it without permission, or in a way that infringes on those rights. It also makes it clear that the use of the IP does not imply any kind of sponsorship or endorsement from the owner. It is important for creators and holders of IP to be aware of the rights they have and to protect them.

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.

What is the Value of Providing Disclaimers in Your Business Plan?

Including disclaimers in a business plan can provide legal protection for the author and any potential investors by clearly stating any limitations or qualifications of the information presented. They can also help to manage expectations by highlighting any potential risks or uncertainties associated with the venture. Additionally, including a disclaimer can demonstrate that the author has taken steps to be transparent and has considered potential legal issues related to the proposed venture.

Do Disclaimers Give Complete Protection from Legal Liability?

Including a legal disclaimer in a business plan may provide some protection against liability from lenders or investors, but it is not a guarantee. Disclaimers can help to manage expectations by highlighting any potential risks or uncertainties associated with the venture, and by making it clear that the information presented is subject to change. However, it’s important to note that a disclaimer does not absolve an author or any other party from their legal liability or potential claims. A disclaimer can also not protect you from any fraud or intentional mispresentation. It’s always best to consult with legal professionals to better understand the potential liabilities and legal obligations that may arise from a business plan, and how a disclaimer may or may not provide protection.