CODE. ARCHITECTS LTD

Executive Summary

CODE. ARCHITECTS LTD, a newly incorporated architectural services company, currently faces high solvency and liquidity risks as indicated by negative working capital and minimal net assets. While governance compliance is up to date and financial oversight is supported by an experienced board member, the company’s limited equity and substantial short-term liabilities warrant close monitoring and further due diligence on cash flow and operational sustainability. Investors should proceed cautiously until stronger financial stability is demonstrated.

CODE. ARCHITECTS LTD - Analysis Report

Company Number: 14596878

Analysis Date: 2025-07-29 13:06 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits negative net current assets, minimal net assets, and a precarious liquidity position with current liabilities exceeding current assets. As a recently incorporated entity with limited financial history and modest equity, there is significant solvency risk.

2. Key Concerns:

• Negative working capital: Current liabilities (£236,406) surpass current assets (£229,402) resulting in a net current liability of £7,004, indicating potential liquidity issues.
• Minimal net assets (£107) and shareholders’ funds (£100) imply very limited financial buffer to absorb losses or meet unforeseen obligations.
• High taxation and social security creditor balance (£129,070) within current liabilities may expose the company to regulatory and cash flow pressures if unsettled.

3. Positive Indicators:

• The company is compliant with statutory filing deadlines, with no overdue accounts or confirmation statements, suggesting good governance practices.
• Presence of a Chartered Accountant and Non-Executive Director (Richard John Peers) on the board may strengthen financial oversight.
• The company operates in a professional services sector (architectural activities, SIC 71111) which typically requires lower capital intensity and can generate steady fee income.

4. Due Diligence Notes:

• Investigate the nature and timing of current liabilities, particularly tax and social security accruals, to understand if these are payable imminently or if payment plans exist.
• Review recent cash flow statements and forecasts to assess the company’s ability to service short-term obligations and the sustainability of operations.
• Examine contracts, client base, and pipeline to evaluate revenue stability and growth prospects given the company’s infancy and low equity base.
• Confirm no director disqualifications or adverse conduct records for all current directors and Persons with Significant Control.
• Assess related party transactions given multiple directors share the same address and have significant control, to rule out governance or conflict of interest concerns.