CANVAS DISTRIBUTORS LIMITED

Executive Summary

Canvas Distributors Limited presents a high-risk profile due to sustained negative equity and working capital deficits, coupled with minimal operational scale and very low cash reserves. While regulatory filings are current and ownership is consolidated under a single director, the financial position raises substantial concerns regarding solvency and liquidity. Further due diligence is essential to evaluate business viability and recovery plans before considering investment.

CANVAS DISTRIBUTORS LIMITED - Analysis Report

Company Number: 13884717

Analysis Date: 2025-07-29 20:34 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks due to persistent negative net assets and net current liabilities, indicating inability to meet obligations from current resources.

2. Key Concerns:

• Negative Net Assets and Shareholders' Funds: The company shows a worsening deficit from -£992 in 2023 to -£2,758 in 2024, signaling ongoing accumulated losses and erosion of equity.
• Liquidity Strain: Current liabilities exceed current assets by £2,758 (2024), with very low cash balances (£295), raising concerns about the company’s ability to cover short-term obligations.
• No Employees and Minimal Operational Scale: The company reported no employees during the period, which may indicate limited operational activity or reliance on external resources, questioning sustainability.

3. Positive Indicators:

• Compliance with Filing Requirements: The company is up to date with accounts and confirmation statement submissions, showing adherence to regulatory requirements.
• Single Controlling Shareholder: Mr. Jermaine Lewis holds 75-100% ownership and control, which can simplify decision-making and potential capital injections if needed.
• Exemption from Audit: The company qualifies for small company audit exemption, reducing administrative burden and costs.

4. Due Diligence Notes:

• Investigate Business Model and Revenue Streams: Limited financial data on turnover or profitability is available; review detailed revenue and cost structure to assess operational viability.
• Examine Creditors and Payment Terms: Significant increase in 'other creditors' from £850 to £2,910 warrants scrutiny to understand creditor composition and payment obligations.
• Assess Director’s Plans for Financial Recovery: Engage with management to understand strategies addressing accumulated losses and liquidity constraints.
• Confirm Absence of Related Party Transactions or Director Loans: Given negative net assets, check for any undisclosed financing from the director or related entities.
• Review Cash Flow Forecasts: Given liquidity risks, obtain cash flow projections to assess short-term survival prospects.

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