Due diligence enquiries are the written questions a buyer’s solicitors and accountants raise about the target business, usually as a long numbered list at the start of the process and in smaller batches after that. The replies are the seller’s written answers, and in a UK deal they carry more weight than many sellers expect.
Why do replies to enquiries matter so much?
Because they rarely stay as answers. In a typical UK share purchase agreement, replies feed into the deal in at least one of three ways. The buyer may ask for a warranty that written replies were true, accurate and not misleading. The seller may treat the replies as disclosed against the warranties in the disclosure letter. Or the buyer’s lawyers may use a reply to support a specific indemnity or a price adjustment.
Sellers usually resist a blanket warranty over replies, and the final position is a matter for negotiation between the solicitors. Whatever the outcome, a sloppy reply is a liability. “Not aware of any disputes” written by a junior manager who did not check the litigation folder can cost real money after completion.
A reply is a statement the seller may have to stand behind. Draft it with the same care as the contract it may end up supporting.
What does a good enquiry and reply process look like?
The process is simple to describe and easy to let slip in the middle of a busy deal. Each question goes through the same stages, and the room records them.
| Status | What it means | Who acts next |
|---|---|---|
| Received | The enquiry has been logged against an index number | Seller’s solicitor, to allocate |
| Allocated | A named owner in the business has the question and a due date | The owner, to draft |
| Drafted | A draft reply exists, with documents cited by index number | Seller’s solicitor, to review |
| Queried | The reviewer has sent the draft back with comments | The owner, to revise |
| Approved | The seller’s solicitor has signed off the wording | Room administrator, to release |
| Released | The buyer can see the reply | Buyer’s advisers, to accept or follow up |
| Closed | The buyer has confirmed no further questions on the point | Nobody; the record stays |
Seven statuses are enough for most deals. More than that, and people stop updating them. Fewer, and you lose the difference between “drafted” and “approved”, which is the one that matters most.
How should enquiries be numbered?
Match the enquiry numbers to the data room index. If the buyer’s solicitors send their own numbered list, keep their numbers as the reference they recognise, but file each question under the index folder it relates to and record the cross-reference.
Reading an enquiry number against the data room index
The payoff comes later. When the disclosure letter is drafted, replies and documents are already grouped by subject. When a question is answered by pointing at a document, the citation (“see 5.3.2, pension scheme rules”) is unambiguous. And when the completion bible is compiled, the replies slot into the same structure as everything else. Our guide to the disclosure letter explains why a stable index is worth protecting.
Two practical rules keep the numbering clean:
- Never renumber the index after the first enquiries arrive. Add new sub-folders at the end of a section instead.
- Give follow-up questions a suffix, so a supplemental question on 5.3.07 becomes 5.3.07a rather than a new number in a different place.
How do you route questions to the right people?
Each enquiry needs exactly one owner. Shared ownership is the most reliable way to get a reply that nobody has checked.
In an owner-managed business, the owners are usually the finance director, the operations lead, the HR manager and one of the founders. Make a short routing table at the start: tax and accounts to the finance director, property to whoever deals with the landlord, employees to HR, commercial contracts to the sales or operations lead. The seller’s solicitor allocates against it, and the room’s Q&A module notifies the owner.
Set deadlines that work back from the buyer’s timetable. If the buyer’s solicitors want replies within ten working days, the owner’s deadline for a draft should be five or six, which leaves time for review, queries and approval.
Check, before the first question arrives, that draft replies and internal comments are visible only to the seller’s team. Most data room Q&A modules separate internal workflow from released answers, but the setting is usually per room or per group. A test with a dummy bidder account takes ten minutes and prevents the worst kind of leak.
What makes a reply good enough to release?
The best replies are short, specific and anchored to documents. They answer the question asked, not a wider one, and they do not volunteer opinions. Some habits help:
- Cite documents by index number rather than attaching new copies. If a document is not in the room yet, upload it first, then cite it.
- Say what was checked. “Having reviewed the litigation folder and made enquiries of the finance director, the company is not aware of…” is better than a bare “none”.
- Mark gaps honestly. “Information to follow” with a date beats a guess, and the status stays open until it is answered.
- Check public records. Answers about share capital, directors or charges should match what is filed at Companies House. Answers about property title should match the register at HM Land Registry. Buyers check both.
- Watch personal data. A reply about a grievance does not need the employee’s name early in the process. The ICO’s guidance for organisations on data minimisation applies to replies as much as to documents.
Should replies go through the data room, email or a spreadsheet?
Email and a shared spreadsheet still run plenty of UK deals, especially smaller ones. They work until the volume grows or the deal goes wrong, and then the lack of a single record starts to hurt.
| Capability | Email and spreadsheet | Word replies document | Data room Q&A module |
|---|---|---|---|
| One record of questions and answers | No | Partly, by version | Yes |
| Reply linked to the documents it cites | No | By reference only | Yes, within the room |
| Drafts kept separate from released answers | Depends on discipline | Yes, until sent | Yes, by permission |
| Approval step before release | Manual | Manual | Built in on most rooms |
| Timestamp of release to each bidder | Email headers only | No | Yes, in the audit trail |
| Works for several bidders at once | Poorly | Poorly | Yes, by bidder group |
The Q&A module is now standard on specialist data rooms. In our UK provider data, Ellty, iDeals, Datasite, Intralinks, Ansarada, Firmex, Drooms, DealRoom, SmartRoom, ShareVault, CapLinked, SecureDocs and Venue by DFIN all include one, while Box does not. If your room lacks it, a disciplined replies document is the next best option, uploaded to the room in each released version.
Many sellers’ solicitors still prepare a formal replies document at the end, collating every released answer for the transaction bible. A room with Q&A export makes that a download rather than a week of copying.
How do you run the process step by step?
Set up the Q&A module before the room opens
Create bidder groups, internal reviewer roles and the approval step. Test that drafts are hidden from bidders.
Log the enquiry list against the index
Enter each question under the index folder it concerns, keeping the buyer's own reference alongside.
Allocate each question to one owner
Use a routing table agreed at the start, with a draft deadline that leaves time for review.
Draft against the documents
The owner drafts the reply, cites documents by index number and uploads anything missing first.
Review and approve
The seller's solicitor reviews every draft, queries anything vague and approves the final wording.
Release and record
Release the approved reply to the right bidder group and let the audit trail record the time and recipients.
Close or follow up
Mark the question closed when the buyer accepts it, or log any follow-up with a suffix on the same number.
What happens to the replies at signing and completion?
At signing, the replies are either disclosed against the warranties, warranted, or both in part, depending on what the solicitors agreed. Either way, the disclosure letter and the SPA need to refer to a fixed set. That is usually the replies as released up to a cut-off date, exported from the room with their timestamps.
After completion, the archive should include the full Q&A history alongside the documents and the audit log. If a warranty claim arises a year later, the question of what the buyer was told, and when, will be answered from that record. Our law firms page covers the room features solicitors usually ask for to support that record.
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Who should answer due diligence enquiries?
A named person in the business who knows the subject, drafting against the documents in the room. The seller's solicitor should review and approve every reply before it is released.
Are replies to enquiries warranted in a UK share sale?
Sometimes. Buyers often ask for a warranty that replies are accurate, and sellers often resist it or disclose against the replies instead. The final position is negotiated between the solicitors.
How quickly should replies be turned around?
To whatever timetable the parties agree, often around ten working days for the first list. Set internal draft deadlines well inside that to leave time for review and approval.
Can bidders see each other's questions in the data room?
Not if the Q&A module is set up by bidder group, which is the usual approach. Check the setting before the first questions arrive, and decide case by case whether an answer should go to all bidders.
What if a data room has no Q&A module?
Use a single replies document in Word, numbered against the index, with each released version uploaded to the room so the audit trail records who saw it and when.