SharePoint is the document management platform most UK businesses already have. For formal M&A diligence, it runs out quickly: there is no NDA gate before document access, no per-user access log exportable for a disclosure letter, and no automatic permission expiry. For UK deal teams that need an auditable, permission-controlled alternative, Papermarkis best for UK deal teams that need a purpose-built M&A data room with EU hosting and SOC 2 Type II compliance.
This guide explains where SharePoint fits in a deal process, where it breaks, and what to look for in a purpose-built replacement. For the full ranked comparison of virtual data rooms ranked for the UK market, including scoring across security, pricing transparency, UK data residency, deal workflow and support, see the main guide.
What SharePoint does, and why deal teams start there
SharePoint is Microsoft's document management and intranet platform, bundled with most Microsoft 365 business subscriptions. For a UK company preparing for a sale or fundraise, the appeal is obvious: the software is already licenced, staff know how to use it, documents are version-controlled, and access can be restricted by folder with a few clicks. A deal team that has spent years using SharePoint for internal collaboration will naturally reach for it when the pressure is on.
It also handles large document sets competently. A SharePoint site can hold hundreds of folders and thousands of files, supports metadata tagging and full-text search, and integrates directly with Word, Excel and PowerPoint, which is where most deal documents are created. For internal document management and working-party collaboration before a process goes external, those strengths are real.
The problem is that a SharePoint site was designed for ongoing internal teamwork among people who share a Microsoft 365 tenancy. A virtual data room is designed for time-limited, permission-controlled disclosure to external parties under legal scrutiny. These are different problems, and the tool built for one is not adequate for the other.
A UK M&A scenario: where SharePoint runs out
Halcyon Engineering Ltd is a Leeds-based precision components manufacturer with 94 employees and annual revenue of approximately eleven million pounds. In June 2026, the majority shareholder instructed a regional corporate finance adviser to run a structured sale process. The adviser recommended building a data room and asked for access within two weeks.
The finance director had already started assembling documents in a SharePoint site. Three years of statutory accounts, the management accounts pack, the asset register, two property leases, and a set of key customer contracts were already there, organised into folders she had created for the audit the previous year. She shared a link with the adviser and assumed the problem was solved.
The adviser came back within a day. First: the link had no NDA requirement attached. Any prospective buyer given the URL could access the documents before any confidentiality agreement was in place. Second: the adviser needed a record of exactly which documents each bidder had seen and when. SharePoint's activity log showed file opens by account name, but exporting it into a format suitable for attaching to the disclosure letter required administrative access the finance director did not have, and the records were interleaved with internal activity from the past three years. Third: the TUPE schedule, which included every employee's salary, contract terms and disciplinary history, was in a folder accessible to all invited users. There was no way to show it to the final two bidders only.
Halcyon moved to a purpose-built data room. The adviser uploaded the same documents, applied folder permissions so the employee schedule was restricted to shortlisted bidders, required each bidder to countersign an NDA before the link resolved, and enabled dynamic watermarking on every download. The audit log from first document access to deal close was exportable in a single click.
Where SharePoint breaks for UK due diligence
The gaps become visible the moment a UK deal process turns formal.
No NDA gate. A data room for any formal diligence process requires the other party to sign a non-disclosure agreement before any document is accessible. SharePoint has no built-in mechanism for this. Teams manage it separately, via email or DocuSign, and the audit trail showing that the NDA was signed before document access is not native to the platform. If the sequence breaks down, the disclosure record has a gap that is very hard to close retroactively.
No per-user granular access log. A data room audit log records every action taken by every named user: which document was viewed, at what time, for how long, and whether it was downloaded or printed. That record is append-only and is used in the disclosure letter to show exactly what each bidder had access to at each stage of the process. SharePoint generates activity logs, but they are not in a format designed for legal certification, they include all internal activity from the wider site, and exporting a clean, named-user record for a specific folder and time period requires SharePoint admin access and manual filtering.
No watermarking.Dynamic watermarking embeds the viewer's name and the time of access into every page of a document, even in a downloaded copy. This does not prevent a determined leak, but it deters casual copying and allows a leaked document to be traced back to its source. SharePoint does not watermark documents on access. Microsoft Information Protection can apply static labels, but applying them dynamically at the point of view, based on who is looking and when, is not a native SharePoint capability.
No Q and A workflow.Formal diligence generates hundreds of buyer questions. In a process run through email, the same question arrives from multiple bidder teams, answers are given at different times, and there is no central record. A purpose-built data room Q and A module routes questions to the right workstream adviser, prevents bidder teams from seeing each other's questions, and records every question and answer in a log that can be reviewed at close.
Permission expiry is manual. At deal close, or when a bidder withdraws, their access should be revoked immediately. In SharePoint, this requires someone to remember to remove the user from the site and from every shared folder, at a point in the transaction when deal fatigue is high and attention is on other things. There is no automatic expiry tied to a deal timeline. Purpose-built data rooms close permissions at a time set in advance, without manual intervention.
Difficult audit trail export for litigation hold. If a transaction is disputed, the buyer may need to demonstrate what was disclosed, when, and to whom. Producing that record from a SharePoint site is a forensic exercise that requires SharePoint administrator access, a precise date range, and manual extraction of the relevant logs from a stream that also contains years of internal activity. A data room audit log is designed to be printed and attached to a disclosure letter at close.
UK GDPR, TUPE and the accountability obligation
Using SharePoint to share deal documents with an external acquirer is not automatically a UK GDPR breach, but it creates accountability obligations that are substantially harder to satisfy than with a purpose-built data room.
The relevant principle is Article 5(1)(f) of UK GDPR, the integrity and confidentiality requirement. Personal data must be processed in a manner that ensures appropriate security, including protection against unauthorised or unlawful processing. For a data room holding employee records, customer contracts with individual names, or financial information traceable to identifiable people, that obligation is live.
Article 5(2) imposes an accountability obligation on top: the controller must be able to demonstrate compliance. In a data room context, that means being able to show, if challenged by the ICO or a party to the transaction, exactly who accessed which personal data, when, and under what authority. SharePoint can produce activity logs, but not in a format that readily answers those questions for a named external user over a defined time period.
TUPE due diligence.Regulation 11 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 requires the outgoing employer to provide employee liability information to the incoming employer at least 28 days before the transfer. That information includes each transferring employee's identity, age, employment terms and conditions, disciplinary and grievance action in the preceding two years, and applicable collective agreements. This is sensitive personal data under UK GDPR.
Placing it in a SharePoint folder accessible to all invited users in a buyer consortium creates an accountability problem. If five people from the acquirer have site access and only two of them should have seen the employee schedule, demonstrating that the other three did not is very difficult without a named-user, per-document access log. A data room with folder-level permissions for named users, and an audit log showing exactly who accessed the employee folder and when, answers that question directly. For more detail on diligence document requirements in a UK M&A process, see the UK M&A data room checklist.
There is also a restricted transfer dimension. If the acquirer is an overseas entity, sharing the SharePoint link with them is a restricted international transfer of the personal data in the site. Microsoft 365 processes data across multiple regions, and while Microsoft publishes standard contractual clauses and a UK Addendum, you remain the controller responsible for ensuring those mechanisms are in place and documented. An EU-hosted data room in an EEA jurisdiction already covered by UK adequacy simplifies that analysis significantly for the storage layer, though it does not remove the need for a transfer mechanism when you grant access to a US-based party.
For a broader explanation of what UK data residency and restricted transfers actually mean in a deal context, including when EU hosting satisfies and does not satisfy the GDPR analysis, see the UK-based provider directory, which covers which providers have a verified UK legal presence and where their infrastructure sits.
What to look for in a SharePoint replacement for M&A
The six capabilities a purpose-built data room provides that SharePoint does not are largely fixed by the requirements of a formal diligence process. Any replacement should be evaluated against the same list.
An NDA gate that prevents any document access before the agreement is countersigned is the single most important control. It must be enforced by the platform, not managed separately in email, and the timestamp of the countersignature should be part of the same audit trail as the first document access.
Granular, folder-level permissions for named users or bidder groups are the second requirement. Different parties at different stages of a process see different documents. A shortlisted buyer sees the full TUPE schedule; a first-round bidder does not. That separation must be enforced at the folder level, per named user, with the permission grant and any subsequent changes recorded in the audit log.
An append-only audit log recording every action by every named user, exportable in a format suitable for attaching to a disclosure letter, is the third. The log must include document views, downloads, print actions and permission changes, and it must be impossible to delete or edit after the fact.
Dynamic watermarking, automatic permission expiry and a Q and A module complete the core feature set. On pricing, the range is wide: for a full cost comparison of every published price across the UK market, including which providers quote in sterling, see the costs overview.
Papermark covers all of these on the Data Rooms plan at EUR 99 per month, with EU hosting by default on AWS eu-central-1 in Frankfurt, SOC 2 Type II and ISO/IEC 27001 certification, and pricing published in full without a sales call. Pricing is in euros only with no sterling option. For a full scored assessment across security, pricing transparency, UK data residency, deal workflow and support, see the best virtual data rooms for the UK in 2026.
For a parallel comparison of another common substitution, the analysis of DocSend alternatives for UK founders covers the same structural questions from a different starting point, and the document checklist in what should be in a data room covers what to put inside whichever platform you choose.
Common mistakes when using SharePoint for deal work
Sharing a link before the NDA is signed. In the pressure of an early process, a seller may share a SharePoint folder link with a prospective buyer before the confidentiality agreement is executed. There is no mechanism in SharePoint to prevent access until the NDA is countersigned. The result is a disclosure record with a gap: documents were accessed before any legal obligation of confidence attached. That gap can become significant if the deal does not complete and the information ends up being used.
Confusing SharePoint permissions with data room permissions. SharePoint folder permissions are set by the site administrator and can be adjusted by anyone with the relevant Microsoft 365 role. In a typical business, that includes the IT team, senior management and the Microsoft tenant administrator. A purpose-built data room creates an isolated permission environment where the only people who can grant or revoke access are the named deal administrators, and every change is logged. The two environments have very different security postures.
Leaving access open after a bidder withdraws. When a prospective buyer steps out of a process, their access to every SharePoint folder that was shared with them should be revoked immediately. This requires manual action across potentially multiple SharePoint sites, shared drives and email attachments. In the rush of a competitive process, it is easy to miss a folder. A data room with automatic permission expiry tied to a deal timeline removes the risk.
Treating the SharePoint audit log as a disclosure record. SharePoint audit logs contain every action across the site over its full history, by every user who has ever had access. They are not designed to be extracted by named external user and by date range in a format suitable for a disclosure letter. Attempting to produce one under time pressure, after the deal has completed, is a slow and error-prone exercise. A data room audit log is formatted for exactly this purpose.
Underestimating the Microsoft 365 tenancy exposure.A SharePoint site sits inside a Microsoft 365 tenancy that may also contain the company's email, Teams conversations, finance system data and HR records. Misconfigured sharing settings or an accidental permission grant can expose more than the intended documents. A purpose-built data room is an isolated environment that has no connection to any other company system.