DRIVING ACADEMY GLOBAL LIMITED

Risk Rating: MEDIUM

Justification: While the company is technically insolvent on a balance sheet basis with net liabilities of £375 (October 2024), the deficit is marginal and has improved from the prior year (£857 deficit). The company maintains positive working capital, and its regulatory filings are fully up to date. However, the persistent negative equity position, lack of profit and loss data, and heavy reliance on a single director create moderate solvency and operational risks that limit the rating to Medium.

Key Concerns

1. Technical Insolvency: The company has reported negative net assets/shareholders' funds for several years across the reviewed history (most notably dropping to £-11,365 in 2021, and sitting at £-375 in 2024). While the deficit is currently small, negative equity means the company is balance-sheet insolvent and relies on creditor forbearance—likely the director—to continue trading.
2. Absence of Profitability Data: As a micro-entity, the company utilizes FRS 105 and has elected not to file a Profit & Loss account. This makes it impossible to determine if the company is operationally profitable, burning cash, or relying on director capital injections to maintain liquidity.
3. Key Person Dependency: The company has only one director (Mr. Neil Jones) who also holds over 75% of the voting rights and shares. With only one employee reported, the business represents a single point of failure; any incapacity of the director would immediately halt operations and could trigger default on liabilities.

Positive Indicators

1. Improving Balance Sheet Position: The net liability position has narrowed significantly from £-11,365 in 2021 to £-375 in 2024. Furthermore, long-term liabilities were reduced by £900 (from £3,100 in 2023 to £2,200 in 2024), indicating active debt repayment.
2. Positive Working Capital: Current assets (£8,405) exceed current liabilities (£7,847), yielding net current assets of £558. This suggests the company can meet its short-term obligations as they fall due over the next 12 months.
3. Regulatory Compliance: The company is actively filing its accounts and confirmation statements on time, with no overdue flags. It has maintained an "Active" status for over 14 years without entering formal insolvency or administration.

Due Diligence Notes

1. Related Party Balances: Investigate whether the current or long-term liabilities include loans from the director. In small, negative-equity companies, director loans often underpin the business; if these loans are callable on demand, liquidity risk is substantially higher than the balance sheet suggests.
2. Revenue and Cash Generation: Request internal management accounts to assess top-line revenue and operating margins. The financial history shows total assets have shrunk from £21,872 in 2020 to £9,672 in 2024. It is critical to determine if this is due to deliberate business wind-down, asset depreciation without reinvestment, or declining sales.
3. Asset Realizability: Assess the composition of the £8,405 in current assets. If a significant portion is tied up in illiquid debtors rather than cash, the company's true liquidity position may be weaker than stated.