Company Number: 14937736

Analysis Date: 2025-07-20 11:16 UTC

1. Risk Rating: MEDIUM
   Justification: ATW Ecology Ltd is a newly incorporated micro-entity (just over one year old) with modest net assets of £24,291. The company shows negative net current assets (£-23,384), indicating current liabilities exceed current assets, which may present liquidity risks. However, the company is not overdue on filings and appears operational with a director in place and some initial capital investment. The goodwill and related party transactions require close scrutiny, but no immediate insolvency indicators are evident.

2. Key Concerns:

• Liquidity Pressure: Current liabilities (£79,584) exceed current assets (£56,200), resulting in a working capital deficit of £23,384, which could impair the company's ability to meet short-term obligations.
• Related Party Transactions and Asset Acquisition: The company acquired assets and goodwill from the sole director’s prior sole trade for £66,995, with a substantial amount (£65,664) owed back to the director as a debtor. This related party balance raises questions about dependency on the director for financing and possible capital structure risks.
• Amortisation of Goodwill: Goodwill of £40,378 is significant relative to total net assets, with £8,749 amortised in the first year. The recoverability of this intangible asset should be assessed carefully to avoid overstating asset values.

3. Positive Indicators:

• Compliance with Filing Requirements: The company is current with both accounts and confirmation statement filings, reflecting good regulatory compliance.
• Clear Ownership and Control: The sole director and 100% shareholder, Andrew Timothy Tillson-Willis, provides clarity of control and accountability.
• Small Employee Base: Only 2 employees, which may allow for lower fixed operating costs and greater management control during early development.

4. Due Diligence Notes:

• Investigate the nature and terms of the related party debt owed by the company to the director, including repayment plans and impact on liquidity.
• Review cash flow forecasts and working capital management to assess whether the negative net current assets position poses a material risk in the near term.
• Evaluate the basis for the goodwill valuation and assess any impairment risks, including the sustainability of the business model and client contracts underpinning goodwill.
• Confirm the accuracy and completeness of financial disclosures, given the company’s micro-entity status and exemption from audit.
• Monitor future filings and operational progress given the company’s infancy and potential for volatility.