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COVENANTS NOT TO COMPETE AND INDEMNITY CLAUSES: AN OVERVIEW FOR ACCOUNTANTS Ross Spence E TABLE OF CONTENTS Page COVENANTS NOT TO COMPETE I. . . . . . . . . . . . . . E1 Ancillary to Employment Contracts.
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A covenant not to compete is a legal agreement in which one party agrees not to enter into or start a similar profession or trade in competition against another party for a specified period of time within a specific geographical area.
Employers and employees are typically required to file a covenant not to compete when entering into an employment agreement.
To fill out a covenant not to compete, the parties involved must clearly outline the terms and conditions of the agreement, including the prohibited activities, the duration of the restriction, and any compensation offered.
The purpose of a covenant not to compete is to protect the interests of a business by preventing employees or contractors from engaging in competitive activities that could harm the business.
Information that must be reported on a covenant not to compete includes the names of the parties involved, the scope of the restriction, the duration of the agreement, and any compensation offered.
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