Company Number: SO307617

Analysis Date: 2025-07-07 21:25 UTC

Risk Rating: MEDIUM

Justification:
Ecosystemiq LLP is an active limited liability partnership incorporated in 2022. The latest accounts (year ended 5 April 2024) show modest net assets of £37,631 and positive net current assets of £26,042, indicating an ability to cover short-term liabilities. However, the significant decrease in net assets from £58,428 in 2023 to £37,631 in 2024, combined with the fact that all members' interests are classified as loans due to members (i.e., repayable capital treated as debt), introduces some financial risk. The LLP has no employees and limited tangible fixed assets, which may reflect small scale or early stage operations. There are no overdue filings or indications of regulatory non-compliance.

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Key Concerns

1. Declining Net Assets and Working Capital
   The net assets fell by approximately 36% (£58.4k to £37.6k) within one year, and net current assets declined sharply from £58,114 to £26,042. This reduction may signal deteriorating financial stability or cash flow constraints that warrant further scrutiny.

2. Members’ Capital Classified as Debt
   All net assets are reported as loans and debts due to members, implying the LLP may be reliant on member funding that is repayable on demand or under certain conditions. This structure could exacerbate solvency risk if members seek repayment during financial stress.

3. No Employees and Limited Operational Scale
   The LLP reported zero employees and relatively low tangible fixed assets (~£11.6k net), which could raise questions about operational sustainability, revenue generation capacity, and business scalability.

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Positive Indicators

• Positive Net Current Assets and Liquidity Position
  Despite the decline, current assets (£26,162) still exceed current liabilities (£120), suggesting the LLP can meet short-term obligations as of the last filing date.

• Timely Regulatory Compliance
  The LLP is up to date with both accounts and confirmation statement filings, indicating good compliance and governance discipline.

• No External Borrowing or Overdue Creditors
  Creditors falling due within one year are minimal (£120) and no taxes or social security liabilities are outstanding, reducing immediate liquidity pressures.

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Due Diligence Notes

• Review Profit and Loss Performance
  The profit and loss account was not filed (small LLP exemption). Obtaining internal financial statements or management accounts would be critical to assess profitability trends and causes of net asset decline.

• Examine Cash Flow Dynamics
  Investigate cash flow statements or bank transaction histories to understand liquidity management and any seasonal or one-off factors impacting cash balances.

• Clarify Members’ Loan Terms and Repayment Obligations
  Understanding the nature, terms, and enforceability of the loans classified as members’ capital is important for assessing solvency risk and potential calls on cash.

• Assess Business Model and Revenue Sources
  With no employees and limited assets, it is important to confirm the LLP’s operational model, client base, and revenue sustainability.

• Confirm No Hidden Liabilities or Contingent Risks
  Given the LLP status and limited disclosures, further inquiry into contingent liabilities, guarantees, or potential disputes is recommended.

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Summary:
Ecosystemiq LLP demonstrates a modest but declining financial position typical of a small, early-stage LLP. While current liquidity appears sufficient and compliance is satisfactory, the reliance on member loans and the downward asset trend introduce medium-term solvency risks. Careful due diligence on operational viability and cash flow sustainability is advised before investment consideration.