ECHM & CO LIMITED
Company number 07757485 · 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.
Investment Risk Analysis: ECHM & CO LIMITED
1. Risk Rating: HIGH
Justification: The company is under an active proposal to strike off from the Companies House register, accounts are overdue, and there has been a dramatic and unexplained increase in "other creditors" from £2,017 to £312,679 in a single year. These factors, combined with the company being effectively a single-person controlled entity with £1 share capital, present significant governance, solvency, and operational concerns that elevate risk to a high level.
2. Key Concerns
Concern 1: Strike-Off Proceedings
The company status is "Active - Proposal to Strike off." This means an application has been made to dissolve the company from the register. This is the most critical red flag as it signals either: - Voluntary cessation of business by the director, or - Compulsory strike-off initiated by the Registrar for non-compliance (likely given the overdue accounts)
Any creditor, contractual counterparty, or investor faces the risk of the company ceasing to exist, with limited recourse once dissolved.
Concern 2: Unexplained Explosion in Other Creditors
Other creditors increased from £2,017 (2023) to £312,679 (2024) — a rise of over 15,000%. This single line item now represents 70% of total current liabilities. No explanation is provided in the filed accounts. This could represent: - Director or related-party loans being recharacterised - Unpaid obligations being accrued - Potential misclassification or aggressive accounting
Without transparency on the composition and nature of this balance, it represents a material uncertainty about the company's true financial position.
Concern 3: Questionable Asset Quality and Recoverability
Trade debtors surged from £159,378 to £362,564 (a 127% increase) while the company is simultaneously being proposed for strike-off. This raises serious questions about: - Whether these are genuine arm's-length trade receivables - The collectability of these debts if the company is dissolved - Whether revenue recognition may be aggressive given the circumstances
Combined with the increase in taxation and social security liabilities (from £58,548 to £117,650), the picture suggests either significant revenue growth with corresponding obligations, or potential financial manipulation.
3. Positive Indicators
Positive Net Asset Position
Net assets stand at £125,738 (up from £100,650 in 2023), indicating the company is not technically insolvent on a balance sheet basis.
Improved Cash Position
Cash at bank increased from £32,972 to £116,988, suggesting some liquidity is available to meet short-term obligations.
Reduction in Long-Term Liabilities
Creditors due after more than one year decreased from £83,892 to £44,475, showing the company is paying down longer-term obligations including hire purchase commitments.
Trading History
The company has been incorporated since 2011 (approximately 13 years), suggesting some operational longevity in the car leasing/rental sector.
4. Due Diligence Notes
| Item | Action Required |
|---|---|
| Strike-off reason | Check the London Gazette for the strike-off notice. Determine whether this is voluntary (director-initiated) or compulsory (Registrar-initiated). If compulsory, it likely stems from the overdue accounts filing. |
| Other creditors composition | Request a detailed breakdown of the £312,679 other creditors balance. Determine if any relates to the director, connected persons, or related entities. |
| Trade debtor verification | Obtain an aged debtor analysis. Confirm whether the £362,564 in trade debtors represents genuine third-party obligations and assess provision for doubtful debts. |
| Taxation liability | Clarify the nature of the £117,650 taxation and social security balance. Confirm whether this represents unpaid Corporation Tax, VAT, or PAYE liabilities and whether HMRC has any outstanding actions. |
| Director background | Conduct checks on Mrs. S V Van Rooyen and Mr. J M Van Rooyen (Secretary) for any director disqualification orders, prior insolvencies, or related company failures. |
| Accounts filing status | The accounts are marked as overdue (due by 31 May 2026 but overdue). Clarify whether the accounts approved on 3 April 2025 have actually been submitted to Companies House and what penalties have accrued. |
| Related party transactions | Given the company is 75%+ controlled by one individual with a family member as secretary, investigate all related party transactions including the hire purchase arrangements and any intercompany balances. |
| Hire purchase commitments | Review the terms of the hire purchase contracts (£35,366 remaining) for motor vehicles. Determine whether these are with arm's-length finance providers or related parties. |
| Registered office | The address (Suite 488, 19-21 Crawford Street) appears consistent with a virtual office/serviced office arrangement. Verify whether this is the company's actual trading location. |
| Business viability | Assess whether the car rental/leasing business is actively trading or has ceased operations, given the strike-off proposal. Request management accounts and trading data for the period after 31 August 2024. |