Company Number: 13917996

Analysis Date: 2025-07-29 20:43 UTC

1. Risk Rating: MEDIUM

Justification: The company, Echo Electric Gates Ltd, is a very young private limited company incorporated in 2022 and operating in the manufacture of electrical equipment. The latest accounts show modest net assets and a small working capital base. There is director funding evidenced by loans, and no employees. While current liabilities are covered by current assets, the presence of director loans and a declining net asset base signals a moderate risk profile for solvency and liquidity.

2. Key Concerns:

• Reliance on Director Loans: The company has director loans amounting to £10,000 (up from £5,000 the previous year), which constitute a significant portion of liabilities and indicate dependence on director funding rather than operational cash flow.
• Declining Net Assets: Net assets decreased from £5,641 in 2023 to £5,212 in 2024, suggesting erosion of equity possibly due to losses or asset depreciation.
• No Employees and Limited Scale: The company reported zero employees on average, indicating a very small or possibly owner-operated business with limited operational scale. This may affect sustainability and growth prospects.

3. Positive Indicators:

• Current Assets Exceed Current Liabilities: Net current assets increased from £2,358 to £8,879, indicating improved short-term liquidity.
• Timely Filing and Compliance: The company is current with its accounts and confirmation statement filings, showing adherence to regulatory requirements.
• Active Website and Contact Information: Presence of an active website and contact details may support operational legitimacy and customer engagement.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loans, including repayment schedules and any associated risks.
• Review profit and loss details (not provided) to assess profitability trends and causes of net asset decline.
• Confirm the business model and operational capacity given the absence of employees and relatively low fixed assets.
• Assess customer base, order pipeline, and revenue stability as these are not disclosed.
• Verify any contingent liabilities or off-balance sheet risks not apparent from the balance sheet.