Non-Compete Covenant

A contractual restriction preventing the seller/promoter from operating a competing business within a defined geography and time period post-sale.

Buyer Example

Buyer acquiring a Coimbatore textile export unit for ₹22 Cr insists on a 5-year, pan-India non-compete from the promoter family, with a separate ₹1.5 Cr non-compete fee carved out of consideration to make the restriction independently enforceable and protect the acquired customer book from founder-led poaching.