Company Number: 13258317

Analysis Date: 2025-07-20 18:06 UTC

1. Risk Rating: MEDIUM

Justification: FLC Solicitors Limited demonstrates positive net assets and a healthy cash position as of the latest financial year, supporting solvency. However, the company has significant secured hire purchase liabilities and a declining net asset trend, which introduce moderate financial risk. The absence of audit and limited disclosure restricts full assessment, warranting a medium risk classification.

2. Key Concerns:

• Significant secured liabilities: Hire purchase contracts totaling approximately £105k secured against assets represent a considerable long-term debt burden relative to the company’s net assets (£97.5k), potentially impacting financial flexibility.
• Declining net assets and working capital: Net assets decreased from £121.4k in 2023 to £97.5k in 2024, and net current assets also declined sharply, indicating pressure on financial stability and liquidity over the last year.
• Lack of audit and limited financial disclosures: As a small company, FLC Solicitors Limited has not undergone an audit, and the statement of income and retained earnings is not delivered, restricting insight into profitability and cash flow dynamics.

3. Positive Indicators:

• Strong cash reserves: Cash at bank increased to £223k in 2024, providing liquidity to meet short-term obligations.
• Positive net current assets: Despite the decline, net current assets remain positive at approximately £58.8k, indicating the company’s ability to cover current liabilities.
• Stable management and ownership structure: Directors and Persons of Significant Control have been consistent since incorporation, with no reported governance issues or director disqualifications.

4. Due Diligence Notes:

• Investigate profitability and cash flow: Obtain management accounts or detailed P&L statements to assess operational performance, given the lack of audited accounts and omitted income statement.
• Review hire purchase agreements: Understand terms, interest rates, and maturity schedules of hire purchase debts to evaluate refinancing risk and impact on operations.
• Assess contingent liabilities and provisions: The company shows provisions for liabilities (~£27k); clarity on their nature and potential impact is needed.
• Confirm regulatory compliance: Verify timely submission of all statutory filings and adherence to Solicitors Regulation Authority requirements given the legal services nature of the business.
• Explore reasons for net asset decline: Examine underlying causes such as asset write-downs, losses, or increased liabilities contributing to the reduced net asset base.