Legal
The document room in a deal
Who saw what, when, and why that matters more than the folder.
In a sale, a financing round or a new partner coming in, the document work looks like a storage problem and is not. What is at stake is traceability: who saw what and when, because what can be argued later depends on it.
The three questions that arrive when a deal sours
| Question | What answers it |
|---|---|
| "You never showed us that" | The record of what was made available and when |
| "We saw it after signing" | The access date, not the upload date |
| "That document was changed" | The versions, with the earlier one kept |
Important
The second is the one most often lost. Uploading a document does not prove the other side saw it; the access log does. An ordinary shared folder gives you the first and not the second.
How to organise it without chaos
- 1
One file per deal, with its own index
The index is a deliverable, not decoration: it is what the other side works through.
- 2
Per-person access, not a shared password
If everyone logs in with the same credentials, the log says nothing.
- 3
In phases
Basics first; sensitive material as the deal advances and not before.
- 4
And a question-and-answer record
What was asked and what was answered belongs in the file as much as the documents.
Watch out
The costliest mistake is opening everything on day one "to move fast". If the deal falls through, you have handed your full information to someone who may be a competitor, with no tiers to show how far each party got.
When the deal closes
Worth knowing
The same applies to small deals. A firm handling share transfers in family businesses has the same problem in miniature, and usually solves it by email — which is exactly where no record exists.
›Can downloads be blocked?
They can be limited, but assume anything visible can be photographed. The log remains the real protection.
›How long must it be kept?
Longer than the deal: claim periods run in years.
›Does it work for insolvency or probate?
Yes, for the same reason: the problem is not storing, it is proving who saw what.
A real case
The situation
A firm handles the sale of a family business and shares everything by email.
What you do
- Sets up the file in phases with per-person access
- Keeps the access log after closing
What you get
Two years later, facing a hidden-defects claim, it can show what was made available and when it was viewed.
The situation
A folder is shared and nobody knows who saw what.
What you do
- Controls access and leaves a trail of what was viewed
What you get
The handover is orderly and verifiable.
The situation
Documentation is uploaded containing material that should not be shown.
What you do
- Reviews the content before sharing
What you get
Nothing extra is handed over.
The situation
The other side asks for something already uploaded.
What you do
- Checks the index of what was shared
What you get
You answer without re-uploading.
The situation
The deal ends and access stays open.
What you do
- Revokes access on closing
What you get
The room does not stay live without reason.
The situation
Nobody knows what is still outstanding.
What you do
- Checks the status of what was requested and delivered
What you get
The process runs on a list.
This article answers
- setting up a data room for due diligence
- sharing documents in an m&a deal
- controlling who sees what in a transaction
- access log for confidential documents