Checklist for Founders: Corporate Governance and Documentation
When a startup begins preparing for a transaction, the focus shifts not only to the numbers and technologies but also to the company’s corporate “skeleton.” The Articles of Association, protocols, board resolutions, and shareholder agreements are not just formalities; they are legally significant documents that define who owns the business and under what conditions, who made key decisions, and how legitimate those steps were.
What does an investor check during due diligence?
An investor will look not only at how intellectual property is formalised, but also at how stock issuances, director appointments, and approvals of major transactions are documented. Special attention is paid to the adherence to procedures and timelines – for instance, the timely holding of meetings and the correct documentation of decisions.
If any documents are missing or signed retroactively, it raises questions. Even if decisions were actually made and all participants were in agreement, without proper documentation, these actions will not have legal validity. Furthermore, the presence of duplicate or contradictory versions of documents, especially in the absence of a centralised repository, will alert the investor's legal team.
Get organised before it becomes urgent
Before starting due diligence, it makes sense to review key issues and documents. Here is a basic checklist for a founder:
- Articles of Association and shareholder agreements: Are the versions current? Are they signed by all parties? Are there any contradictions between versions?
- Stock issuances: Are they correctly formalised? Are there all the necessary resolutions, registers, and supporting documents?
- Director appointments and resignations: Are they reflected in protocols and officially submitted?
- Approvals of major transactions: Are there protocols and corresponding corporate approvals?
- Signatures: Have the documents been signed by everyone who needed to sign them?
- Chronology: Are the sequence of events, dates, and wording logical? Are there any discrepancies between the documents?
- Centralisation: Are the documents gathered in one place and available on request?
Such an audit is best conducted before the transaction begins – this allows any gaps to be addressed in advance, without rush or distraction from negotiations.
Digital-first approach
Today, corporate order is not just about papers in a folder, but, first and foremost, about an organised cloud storage system. File names, folder structure, and dating – everything must be transparent and logical. This digital organisation of documents simplifies interaction with lawyers and consultants, saves time, and reduces the risk of errors.
Well-organised corporate documentation helps avoid legal and reputational risks, as well as boosts investor confidence.
Authors: Viktoria Markova, Irina Kuheika
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