DERMIS CLINIC LTD
Company number 09152285 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Financial Health Assessment: DERMIS CLINIC LTD
1. Financial Health Score: F
Explanation: This company is in critical condition — technically insolvent with net liabilities of £253,448, no cash reserves, no trading activity, and a persistent tax liability exceeding a quarter of a million pounds. The patient, in medical terms, is in financial cardiac arrest. Without significant intervention or capital injection, the company has no viable path to recovery in its current form.
2. Key Vital Signs
| Vital Sign | Reading | Status |
|---|---|---|
| Net Assets | (£253,448) | 🔴 Critical — Insolvent |
| Net Current Assets (Working Capital) | (£249,562) | 🔴 Critical — Cannot pay debts as they fall due |
| Cash Reserves | £0 | 🔴 Critical — No pulse |
| Taxation & Social Security Liability | £261,557 | 🔴 Critical — Persistent, unresolved |
| Total Liabilities | £278,413 | 🔴 Elevated and unsustainable |
| Debtors (Related Party) | £24,965 | 🟡 Unreliable — owed by connected parties |
| Trading Status | Non-trading | 🔴 No revenue generation |
| Employees | 0 | 🔴 No operational activity |
Vital Signs Interpretation
Net Assets (Negative Equity): The company's liabilities exceed its assets by over a quarter of a million pounds. This is the financial equivalent of a patient whose debts far exceed their capacity to pay — the balance sheet is underwater.
Working Capital Deficit: With current liabilities of £274,527 and current assets of just £24,965 (all owed by related parties), the company has a working capital deficit of nearly £250,000. This means for every £1 of short-term obligations, the company has only approximately 9p to meet it. This is a textbook symptom of insolvency.
Cash Position: Zero cash on hand. The financial heartbeat has stopped — no liquidity whatsoever to meet obligations.
Tax Liability: The £261,557 taxation and social security debt has remained unchanged year-on-year, suggesting this is a legacy liability that is neither being paid down nor actively managed. This is likely a significant HMRC exposure.
3. Diagnosis
Primary Condition: Insolvency with No Operating Revenue
The financial data reveals a company that has suffered a catastrophic decline from a position of reasonable health. The trajectory tells a concerning story:
Disease Progression — Historical Trend
| Year | Net Assets | Cash | Trajectory |
|---|---|---|---|
| 2019 | £83,319 | — | 🟢 Healthy |
| 2020 | £364,035 | £313,035 | 🟢 Strong |
| 2021 | £953,022 | £56,132 | 🟡 Anomalous spike |
| 2022 | £62,236 | £36,791 | 🔴 Sharp decline |
| 2023 | £29,341 | £7,112 | 🔴 Deteriorating |
| 2024 | (£250,426) | — | 🔴 Critical |
| 2025 | (£253,448) | £0 | 🔴 Terminal without intervention |
Key Diagnostic Observations
1. The 2021 Anomaly: The dramatic spike to £953,022 in net assets (with total assets of £1,157,862) followed by an equally dramatic collapse to £62,236 by 2022 warrants scrutiny. This pattern suggests either: - A significant asset (possibly property or an investment) was revalued or acquired and subsequently written off or disposed of - An intercompany transaction inflated the balance sheet temporarily - A restructuring or group reorganisation occurred
2. Related Party Dependence: The only asset on the balance sheet — £24,965 in debtors — is almost entirely (£24,964) owed by related parties. This is not a reliable asset; it represents money owed by those connected to the business, not independent third-party revenue.
3. Non-Trading Status: The accounts explicitly state "The company did not trade in the year." This means the company has no revenue, no operations, and no prospect of organic recovery. The patient is on life support with no signs of brain activity.
4. Erosion of Cash Reserves: Cash has drained from £313,035 (2020) to zero (2025), representing a complete haemorrhage of liquidity over five years.
5. Persistent Tax Liability: The unchanged £261,557 tax liability across two years suggests HMRC may have a standing claim that could be enforced at any time, potentially leading to winding-up proceedings.
6. Minimal Share Capital: With only £1 in share capital, there is negligible equity cushion. The entire P&L reserve is negative at (£253,449), representing accumulated losses.
Secondary Condition: Potential Director Obligations
As an insolvent company, the director (Mr Mohammad Naeem Chaudhry) has heightened legal duties under the Insolvency Act 1986. Continuing to trade while insolvent — or allowing the company to drift in a zombie state — could expose the director to personal liability for wrongful trading. The fact that the company is not currently trading mitigates this risk somewhat, but the director must still act in the best interests of creditors.
4. Recommendations
Immediate Actions (Critical — Within 30 Days)
| Priority | Action | Rationale |
|---|---|---|
| 🔴 1 | Seek insolvency advice immediately | The company is insolvent and the director needs professional guidance on duties and options |
| 🔴 2 | Engage with HMRC regarding the £261,557 tax liability | This is the largest creditor and the most likely to take enforcement action; proactive engagement is essential |
| 🔴 3 | Assess whether the company should continue | A non-trading, insolvent company with no prospects may be better placed into voluntary liquidation |
Short-Term Actions (1-3 Months)
| Priority | Action | Rationale |
|---|---|---|
| 🟡 4 | Recover the £24,964 related party debtor | This is the only asset; if recoverable, it provides marginal liquidity |
| 🟡 5 | Investigate the 2021 balance sheet anomaly | Understanding what caused the spike and collapse may reveal whether assets were improperly transferred or lost |
| 🟡 6 | Consider a Members' Voluntary Liquidation (if solvent) or Creditors' Voluntary Liquidation | An orderly winding-up protects the director from wrongful trading claims and ensures creditors are treated fairly |
Strategic Considerations
- If the intention is to restart the clinic business, it should be done through a new vehicle with fresh capital — not through this insolvent shell which carries significant legacy liabilities.
- The director must be cautious about preferential transactions — paying one creditor (particularly connected parties) over others while insolvent can be reversed by a liquidator.
- If Dr Mohammed Sefahn Chaudhry (the majority PSC) wishes to preserve the business, a capital injection of at least £253,448 would be required to restore solvency, plus additional working capital to resume trading.
Warning Signs to Monitor
- ⚠️ HMRC winding-up petition (check for filings)
- ⚠️ County Court Judgments against the company
- ⚠️ Any attempt to transfer assets below market value to related parties
- ⚠️ Director disqualification proceedings
Summary
This company is in terminal financial condition. It is insolvent by both the balance sheet test (liabilities exceed assets by £253,448) and the cash flow test (it cannot pay its debts as they fall due). It has no cash, no revenue, no employees, and a persistent tax liability of over a quarter of a million pounds. The only realistic options are either a significant capital injection to restore solvency or an orderly liquidation to protect creditors' interests and shield the director from personal liability.