Company Number: 12674481

Analysis Date: 2025-07-20 18:37 UTC

1. Risk Rating: HIGH

   The company exhibits significant financial distress as evidenced by persistent net liabilities exceeding £7,800 in prior years and worsening to nearly £9,840 at the latest reporting date. Current liabilities substantially exceed current assets, indicating liquidity challenges and inability to meet short-term obligations. The presence of large long-term creditors related to lease premium and director loans further stresses solvency.

2. Key Concerns:

   • Negative Net Assets & Shareholders' Funds: The company has reported negative net assets and shareholders' funds for multiple years, reflecting accumulated losses and erosion of capital.
   • Working Capital Deficit: Current liabilities (£1,410) far exceed current assets (£253), resulting in negative net current assets (-£1,157), signaling potential cash flow problems.
   • Significant Long-Term Liabilities: Creditors falling due after more than one year total £30,350, primarily composed of lease premium and director advances, indicating high fixed obligations that may pressure cash flows.

3. Positive Indicators:

   • Compliance & Filing: The company is active, with no overdue filings for accounts or confirmation statements, suggesting satisfactory regulatory compliance.
   • Sole Shareholder & Control: Control is consolidated under a single individual (Mr Hasan Salih) with 75-100% ownership and voting rights, which may facilitate decisive management actions.
   • Small Scale Operation: The company operates in a niche service industry (hairdressing and beauty treatment) with only one employee on average, potentially keeping operational costs low.

4. Due Diligence Notes:

   • Examine Lease Obligations: Investigate the nature and terms of the £21,000 lease premium creditor, including payment schedule and impact on cash flows.
   • Director Loans & Related Party Transactions: Review details and security of director advances totaling £9,350, including repayment plans and potential conflicts of interest.
   • Profit & Loss Account & Revenue Trends: Since profit and loss account was not filed, obtain detailed income statement to assess operational performance, revenue streams, and cost structure.
   • Business Model Viability: Assess whether the company’s negative equity and liquidity position stem from temporary issues or fundamental operational inefficiencies.
   • Management Changes: Review impact of director changes in late 2023 and early 2025 on governance and strategic direction.

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