After Selling: Plan Your Next Activity Around the Actual Noncompete and Other Duties

Separate your seller, worker and investor roles

List each person or entity signing the purchase agreement, covenant, note, consulting or employment agreement and any related documents. Describe the goodwill or ownership interests being transferred and your intended continued work. A sale restriction and an employee restriction may involve different facts and applicable requirements. Do not treat a purchase price as approval of every restraint.

Illinois Section 5 excludes specified goodwill or ownership-interest purchase/sale covenants from this Act’s noncompete definition.

Have counsel assess your actual transaction and any separate employment arrangement under current applicable law. The definition exclusion is not a determination that an agreement is enforceable. Do not import employment thresholds or rules into a business sale without reviewing which provisions and parties they actually govern.

Describe the activities you intend to keep

Make the next chapter concrete: proposed services, customer groups, locations, ownership interests, board roles, employment, investments and continuing relationships. Provide counsel with actual activities rather than a broad statement that you want freedom to work. Include any seller-retained business, property or pre-existing investment that needs explicit treatment.

Review the precise restricted conduct, parties, period and geographic or customer scope. Ask counsel to draft any accepted exceptions clearly. A familiar three- or five-year term is not a legal safe harbor, and a local business label does not automatically decide the permissible territory.

Use the current federal status without overreading it

The FTC states that its 2024 rule is not in effect or enforceable.

Do not present historical rule text as an operative nationwide ban or use that status to approve an individual agreement. Ask counsel to review current governing law, the actual facts and any applicable separate duties. Use the general business-sale covenant guide for the broader sale-versus-employment distinction; this page focuses on your proposed next activities.

Keep confidentiality, intellectual-property, nonsolicitation and transition obligations separate in the register. Permission to consult during the handover does not necessarily permit unrelated competitive work or use of customer information. Record the actual consent required and its status before taking a step that relies on an exception.

Resolve payment and amendment assumptions before signing

Have counsel reconcile the covenant with the purchase payments, seller note, earnout, employment termination and dispute provisions. Do not assume a missed payment, ended consulting role or later transaction automatically cancels a restriction. Identify the actual documents and remedies rather than promising a self-executing sunset.

Obtain agreed exceptions and changes through the required authorized written process. Do not rely on a verbal reassurance, automatic court rewrite or a stack of backup clauses as proof of validity. Retain signed versions and a dated register of each continuing obligation and authorized permission.

Use the handover worksheet to bound promised transition work and the offer-comparison tool to keep cash, deferred consideration and continuing duties visible. The decision is whether the actual accepted terms fit your plans after professional review, not whether a generic covenant sounds customary.