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Operating Agreement Non Compete Clause for the United Kingdom

Operating Agreement Non Compete Clause Template for England and Wales

This document is a non-compete clause incorporated within an operating agreement, governed by the laws of England and Wales. It establishes restrictions on competitive activities for business members, partners, or officers, defining the scope, duration, and geographic limitations of such restrictions. The document ensures compliance with UK competition law while protecting legitimate business interests through enforceable restraints of trade.

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What is a Operating Agreement Non Compete Clause?

The Operating Agreement Non Compete Clause is essential for businesses operating in England and Wales seeking to protect their interests from competitive activities by their members, partners, or officers. This document is typically implemented when establishing or modifying business operating structures, particularly in situations involving valuable intellectual property, client relationships, or trade secrets. It must carefully balance the protection of legitimate business interests with the principles of reasonable restraint of trade under English law. The clause defines prohibited activities, temporal and geographic scope, and enforcement mechanisms while ensuring compliance with UK competition law and relevant precedents.

What sections should be included in a Operating Agreement Non Compete Clause?

1. Parties: Identification and details of all parties to the agreement

2. Background: Context and purpose of the non-compete provisions

3. Definitions: Key terms used throughout the agreement including 'Restricted Business', 'Territory', 'Confidential Information'

4. Scope of Restrictions: Detailed description of prohibited activities

5. Duration: Time period for which restrictions apply

6. Geographic Limitations: Territorial scope of restrictions

7. Enforcement: Mechanisms for enforcing the restrictions

What sections are optional to include in a Operating Agreement Non Compete Clause?

1. Garden Leave Provisions: Additional provisions applicable when employment relationships are involved, typically used for senior employees or directors

2. Non-Solicitation Provisions: Additional restrictions on approaching customers/employees, used when protecting customer relationships is crucial

3. Consideration: Details of payment or benefit in exchange for restrictions, included when specific consideration is being provided

What schedules should be included in a Operating Agreement Non Compete Clause?

1. Schedule of Restricted Businesses: Detailed list of competing businesses or activities

2. Territory Map: Visual representation of geographic restrictions

3. Confidential Information Schedule: Detailed list of protected information and trade secrets

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

England and Wales

Publisher

Ƶ

Cost

Free to use

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