GEM BUD 1 CHIPETTE LTD

Executive Summary

Gem Bud 1 Chipette Ltd is a newly incorporated micro-entity in specialised construction activities, showing compliance with filing obligations but limited financial resources. The company exhibits liquidity constraints, evidenced by negative working capital and minimal net assets, which pose moderate solvency risks. Close monitoring of cash flow, operational progress, and director capacity is advised to assess ongoing viability.

GEM BUD 1 CHIPETTE LTD - Analysis Report

Company Number: 14409354

Analysis Date: 2025-07-29 16:07 UTC

1. Risk Rating: MEDIUM

Justification: The company is very young (incorporated in late 2022) with micro-entity accounts showing a marginally positive net asset position (£323) but persistent net current liabilities and negative working capital. The financials indicate limited scale and constrained liquidity, which raises caution on short-term solvency and operational sustainability. However, there are no overdue filings or regulatory compliance issues reported.

2. Key Concerns:

• Negative Net Current Assets: The company has current liabilities (£30,036) exceeding current assets (£28,546), resulting in a working capital deficit of £1,490 as of the latest year end, indicating potential liquidity stress.
• Very Low Net Assets and Equity: Shareholders’ funds are only £323, up from £131 a year earlier, reflecting minimal capitalization and limited buffer against losses or unexpected expenses.
• Single Director Ownership and Control: Full ownership and control by one director (Gemma Budd) concentrating operational and governance risk in one individual, with limited evidence of broader management or oversight.

3. Positive Indicators:

• No Filing or Compliance Issues: Accounts and confirmation statements are filed on time, which suggests adherence to regulatory requirements.
• Slight Improvement in Financial Position: Net assets increased from £131 to £323, and current assets have more than doubled year-over-year, indicating some growth in resources.
• Micro-Entity Reporting Simplifies Financials: As a micro-entity, reporting obligations are minimal, reducing administrative burdens and costs.

4. Due Diligence Notes:

• Cash Flow and Working Capital Management: Investigate the company’s current cash flow dynamics and how it manages short-term liabilities given persistent negative net current assets.
• Revenue Streams and Profitability: Examine underlying trading activities, contracts, and whether the company is generating sustainable income to improve liquidity.
• Director’s Background and Operational Involvement: Assess the capacity, experience, and commitment of the sole director, especially given her stated occupation as a carpenter and full control of the company.
• Future Funding Plans: Determine if there are plans for capital injection or borrowing to strengthen the balance sheet.
• Nature and Timing of Creditors: Review creditor profiles and payment terms to assess any risks related to supplier or creditor pressure.