Privacy Matters in Business Sales

When buying or selling a business, most people focus on the purchase price, finance, warranties, and tax. A recent change to New Zealand’s privacy law means privacy now deserves a place on that list as well.

From 1 May 2026, the Privacy Amendment Act 2025 introduced Information Privacy Principle 3A, or IPP 3A. In simple terms, it creates new obligations where an organisation collects personal information from someone other than the individual concerned, unless an exception applies.

That is particularly relevant in a business sale. During due diligence, a purchaser may receive information about employees, customers, suppliers, contractors, and other people connected with the business. In many cases, that information is being provided by the vendor rather than collected directly from those individuals.

The natural question is whether a purchaser must now notify every person whose information it receives. The answer is not always. The legislation recognises there are circumstances where notification may be impractical or could undermine the purpose of the collection, and a number of statutory exceptions may apply.

Even so, businesses should not assume they are automatically covered. This change is a timely reminder to think carefully about how personal information is shared during the sale process. It may be sensible to ask whether identifiable information is actually needed at that stage, whether data can be anonymised or aggregated, whether access is limited to those who genuinely need it, and whether confidentiality agreements properly deal with use, return, or destruction of information if the transaction does not proceed.

The practical takeaway is this: privacy is now part of good transaction management. It sits alongside confidentiality, warranties, and due diligence planning as another area of risk that needs to be managed properly.

At Asco Legal, we help buyers and sellers work through business transactions with a practical, commercially minded approach. If you are preparing for a sale or purchase, now is a good time to make sure your due diligence process is keeping up with the law.

 09 308 8070 |  ascolegal.co.nz |  [email protected]