Company Number: 13476495

Analysis Date: 2025-07-29 15:04 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risk, demonstrated by persistent negative net assets and net current liabilities over multiple years. The large and growing deficit in shareholder funds and current liabilities exceeding current assets raise concerns about its ability to meet short-term obligations.

2. Key Concerns:

• Solvency Risk: The company has net liabilities of approximately £474k as of May 2024, worsening from prior years, indicating balance sheet insolvency.
• Liquidity Concerns: Current liabilities (£830k) significantly exceed current assets (£467k), resulting in negative net working capital of £363k. This suggests potential cash flow difficulties in meeting immediate debts.
• Dependence on Related Party Funding: Substantial amounts (£389k) owed to a related party director are noted, which may indicate reliance on director loans for ongoing operations, posing risk if these funds are withdrawn or not renewed.

3. Positive Indicators:

• Active Legal Practice with Experienced Directors: The company operates in the solicitors sector with three directors including a solicitor and an operations manager, suggesting operational expertise.
• No Overdue Filings: Accounts and confirmation statements are filed on time, indicating regulatory compliance and governance discipline.
• Increasing Tangible Fixed Assets: Tangible assets have increased to £44k, showing some investment in fixed assets which may support operations.

4. Due Diligence Notes:

• Review the nature and terms of director-related party loans and their repayment plans to assess financial support sustainability.
• Investigate cash flow forecasts and management plans addressing working capital deficits and net liabilities.
• Confirm ongoing client base and revenue streams given the high liabilities and negative equity position.
• Evaluate any contingent liabilities or off-balance sheet obligations not disclosed in current filings.