Company Number: 14007279

Analysis Date: 2025-07-29 18:48 UTC

1. Risk Rating: HIGH

Justification: Colombo 16 Ltd demonstrates persistent negative net assets and net current liabilities over its financial history from 2022 to 2025, indicating an ongoing deficit in working capital and shareholders' funds. The company’s liabilities exceed its assets by a significant margin (£88,892 at the latest year-end), which raises concerns about its solvency and ability to meet short-term and long-term obligations. This financial position, combined with no audit conducted and limited disclosure due to small company exemptions, presents a heightened risk profile.

2. Key Concerns:

• Solvency and Negative Equity: The company’s net assets have been negative since incorporation, worsening each year, suggesting accumulated losses and potential insolvency risk.
• Liquidity Constraints: Net current liabilities of £79,043 at the latest year-end imply the company does not possess sufficient short-term assets to cover immediate liabilities, potentially leading to cash flow difficulties.
• Limited Transparency and Auditing: The company has taken advantage of audit exemptions and has not filed a profit and loss account, which restricts the ability to assess operational profitability and cash flow quality.

3. Positive Indicators:

• Active Status and Timely Filings: The company remains active and current with its statutory filings (accounts and confirmation statements) with no overdue submissions, indicating regulatory compliance and governance diligence.
• Single Director and Shareholder Control: Mr. Caleb Alan Joseph holds full ownership and directorship, which may allow for quick decision-making and streamlined management.
• Stable Industry Classification: Operating as a licensed restaurant (SIC 56101), the company is in an established sector with potential for revenue generation if operational challenges are addressed.

4. Due Diligence Notes:

• Examine Cash Flow Statements and Profitability Metrics: Obtain detailed internal management accounts or cash flow reports to evaluate the company’s ongoing operational cash generation and expense management.
• Investigate Debt Terms and Financing Arrangements: Understand the nature of bank borrowings (£53,001) and other creditors, including repayment schedules and covenants, to assess refinancing or default risk.
• Assess Business Model Viability and Market Position: Review the company’s business plan, revenue trends, and competitive positioning in the licensed restaurant sector to gauge future sustainability.
• Confirm Accuracy of Employee Numbers and Cost Management: The reported average employee count decreased from 19 to 10; verify this trend and how it impacts cost structure and service capacity.
• Review Director’s Plans for Addressing Negative Equity: Engage with management to understand strategies for reversing losses and restoring financial health.