01Key takeaways
- Do the corporate housekeeping first, because a data room is only as good as the records inside it.
- Every share should trace back to a resolution, the right filing and an entry in the register of members.
- Tax compliance, employment records and data protection all sit on a typical due diligence list.
- Organise the data room to follow the investor's due diligence list, and keep it current.
An investor's first look at your business is the pitch. The second is the data room, and that is where many deals slow down. Missing filings, an out-of-date share register or a key contract nobody can find all turn into questions, conditions or a lower valuation.
The fix is straightforward, if not quick. Do the corporate housekeeping first, then build the data room from clean records. This checklist sets out what to cover for a Kenyan company.
Start with the housekeeping
Investors and their advocates test whether your records match reality. They compare the company's own registers with what the Registrar of Companies holds, check that tax affairs are current and read the contracts behind your revenue. Fixing a gap before due diligence takes days. Explaining it during due diligence can take weeks.
Give one person ownership of the exercise, set a date and work through the areas below. Where records are missing, rebuild them properly with your company secretary and advocate.
Company records and filings
The Companies Act, 2015 requires every company to keep statutory registers and to file certain documents with the Registrar. Check that you have:
- The certificate of incorporation, current articles of association and any special resolutions that changed them.
- A recent CR12 from the Registrar confirming the directors and shareholders.
- An up-to-date register of members and register of directors.
- A register of beneficial owners, with a copy lodged with the Registrar.
- Annual filings with the Registrar up to date, with no missing years.
- Signed minutes and resolutions of board and shareholder meetings.
- A schedule of charges over company assets, checked against the Registrar's records and the Collateral Registry.
Share records and ownership
The cap table is often where the first problems appear. Every share in issue should trace back to a resolution, a filing with the Registrar where one is required, and an entry in the register of members. Share certificates should match.
List anything that could change the cap table: share options promised to staff, convertible loans, nominee holdings, side letters and informal promises to early backers. Investors will ask, and an undisclosed promise found late can stall a deal. Make sure the beneficial ownership details you have lodged agree with the cap table.
Contracts, tax and intellectual property
- Signed copies of material customer, supplier, distribution and lease agreements, with expiry dates and any change-of-control or assignment clauses flagged.
- Loan agreements, guarantees and security documents.
- A current KRA tax compliance certificate.
- Evidence that tax filings and payments are up to date, including corporation tax, PAYE and VAT where it applies.
- Correspondence on any tax assessment, objection or dispute.
- Trade marks registered with the Kenya Industrial Property Institute in the company's own name.
- Written assignments of intellectual property from the developers, designers and contractors who built your product or brand.
- The licences and permits the business needs to operate, with renewal dates.
Employment records and data protection
- Written employment contracts in line with the Employment Act, 2007, plus key policies and the staff handbook.
- Evidence that PAYE, NSSF, Social Health Insurance Fund and Affordable Housing Levy deductions are remitted on time.
- Work injury cover as the Work Injury Benefits Act, 2007 requires.
- Terms for key managers, including any equity promises.
- Registration with the Office of the Data Protection Commissioner, where the Data Protection Act, 2019 requires it.
- Privacy notices, data processing agreements with suppliers and a record of any data breaches.
Remember that the data room itself holds personal data. Share employee information in summary or anonymised form until an investor genuinely needs the detail.
Build the data room
Once the records are clean, the data room is mostly organisation. Use a virtual data room with access controls and an activity log. Number the folders to follow the sections of a typical due diligence list: corporate, shares, financial, tax, commercial, intellectual property, employment, data protection, disputes and insurance. Add a one-page index, name files consistently and keep one current version of each document.
Sign a non-disclosure agreement before you open access, and release commercially sensitive material in stages as talks become serious. Keep a log of questions and answers so every investor gets consistent responses. Ask one person to keep the room current, because a stale data room raises the same doubts as a messy one.
How we help
Epiidosis Africa runs this exercise through our Growth readiness programme. Our financing and transaction advisory practice reviews your records against a typical investor due diligence list, flags the gaps, builds the data room index and prepares the financial model and investor materials. Our HR practice reviews employment records and policies, and our insurance practice reviews existing cover. Where records need legal correction, we work alongside your company secretary and advocates. When you are ready, we can introduce you to suitable investors.
We don't invest, and we can't promise a deal. The decision rests with the investor.
NoteGeneral information, not financial, legal or insurance advice.