BASEMENTS SOLUTIONS LIMITED

Executive Summary

Basements Solutions Limited exhibits significant financial distress evidenced by negative net assets and a current liability overhang, raising high solvency and liquidity risks. While the company complies with statutory filings and remains active, its operational scale and continued losses warrant careful scrutiny. Further due diligence should focus on cash flows, underlying causes of losses, and related party activities to better assess viability.

BASEMENTS SOLUTIONS LIMITED - Analysis Report

Company Number: 12990923

Analysis Date: 2025-07-19 12:53 UTC

1. Risk Rating: HIGH
   Justification: The company shows persistent negative net assets and shareholders' funds, indicating insolvency on a balance sheet basis. Current liabilities significantly exceed current assets, raising liquidity concerns.

2. Key Concerns:

• Negative Net Assets: The company’s net assets and shareholders’ funds have been negative and worsening from -£37,717 in 2022 to -£40,608 in 2023, indicating accumulated losses and potential insolvency risk.
• Liquidity Deficit: Current liabilities (£69,452) notably exceed current assets (£28,278), resulting in a net current liability position of approximately -£41,174, which suggests difficulty in meeting short-term obligations.
• Operational Scale and Sustainability: The company employs only one person (the director) and operates as a micro-entity, limiting operational capacity. The small scale combined with financial weakness raises concerns about business sustainability.

3. Positive Indicators:

• Compliance with Filings: No overdue accounts or confirmation statements were noted, demonstrating regulatory compliance and good governance in maintaining statutory obligations.
• Active Trading Status: The company remains active since incorporation in 2020 without entering liquidation or administration, suggesting ongoing operations despite financial challenges.
• Full Control by Director: The sole director and 75-100% shareholder alignment may facilitate swift decision-making and strategic flexibility.

4. Due Diligence Notes:

• Examine Cash Flow and Profitability Trends: Assess recent cash flow statements and profit and loss accounts (not filed publicly due to micro-entity exemption) to understand operational cash generation and revenue stability.
• Investigate Causes of Persistent Losses: Review contracts, project pipeline, and any contingent liabilities to evaluate whether losses stem from temporary issues or structural problems.
• Assess Related Party Transactions: Given sole director ownership and small scale, verify any transactions with related parties that might affect financial health or risks.
• Review Website and Marketing Claims: The domain bbcconstruction.co.uk is active with a slightly different address; explore potential brand confusion or rebranding implications given the recent name change from BBC CONSTRUCTION LTD.