ELCOTT LTD

Risk Rating: MEDIUM While the company demonstrates a healthy balance sheet with positive net assets and strong liquidity, the rating reflects structural and governance uncertainties inherent in micro-scale entities. The most notable concern is the mathematical discrepancy in the Persons with Significant Control (PSC) register, where two individuals claim ownership of more than 75% of the shares, alongside a high key-person dependency given the single-employee structure.

Key Concerns: * PSC Register Discrepancy: Both Mrs. Dominika Paulina Dering and Mr. Tom Ellis are listed as owning "more than 75%" of the company's shares. As a private limited company with a declared share capital of only £100, it is mathematically impossible for two individuals to independently hold >75% of the issued share capital unless there are distinct share classes with separate voting/rights structures not disclosed in the basic filings. This inconsistency raises governance and transparency questions. * Key-Person Dependency and Scale: The company reports an average of only one employee throughout the financial year. As a provider of accounting and bookkeeping services (SIC 69201/69202), the firm's operational capability and revenue generation are entirely dependent on a single individual, presenting significant business continuity risk. * Rapid Balance Sheet Expansion and Liability Increase: In the year ending 2025, current assets surged from £8,728 to £44,935, while current liabilities increased from £4,559 to £18,682. While net current assets remain positive, the sudden fourfold increase in creditors (amounts falling due within one year) warrants scrutiny to ensure short-term obligations can be met as they fall due.

Positive Indicators: * Strong and Growing Net Asset Position: The company has demonstrated a consistent trajectory of building equity. Net assets have grown from £100 at incorporation to £27,173 as of February 2025, indicating retained profitability and accumulated working capital. * Healthy Liquidity: As of February 2025, current assets (£44,935) comfortably exceed current liabilities (£18,682), resulting in net current assets of £26,253. This provides a solid buffer to meet short-term obligations. * Regulatory Compliance: The company is up to date with its statutory filings. Accounts for the year ending 28 February 2025 were approved in May 2025, and neither the accounts nor the confirmation statement are overdue.

Due Diligence Notes: * Shareholding Structure: Investigate the exact share allocation and any existing shareholders' agreement. Clarify how the >75% ownership is applied to both PSCs to ensure there are no hidden control disputes or unreported beneficial owners. * Nature of Liabilities: Examine the breakdown of the £18,682 in current creditors. Determine how much relates to corporation tax/VAT deferred versus trade creditors, as this impacts cash flow risk. * Operational Premises: The registered office (20-22 Wenlock Road, London) is a well-known virtual office and mail forwarding address. Verify the actual trading location and ensure client records are securely maintained. * Profitability Metrics: As a micro-entity, the company files filleted accounts under FRS 105, meaning the Profit & Loss account is not delivered to the Registrar. The exact turnover and profit margins cannot be verified from public data; the increase in net assets is the only proxy for profitability. * Business Pivot: The company was incorporated as "Elcott Photographic Ltd" in February 2019 and changed its name in July 2019. Investigate whether the original photographic business was merely a placeholder, or if there was an early-stage pivot to accounting services, and confirm this aligns with the director's professional background.