Company Number: 15805631

Analysis Date: 2025-07-20 11:35 UTC

1. Risk Rating: HIGH
   Justification: The company shows significant negative net current assets (£-41,150) and substantial long-term creditors (£355,000) relative to modest net assets (£53,850) shortly after incorporation. The heavy reliance on creditor financing secured by fixed and floating charges, combined with minimal cash on hand (£100), suggests high solvency and liquidity risk at this early stage.

2. Key Concerns:

• Liquidity Risk: The company holds only £100 in cash against current liabilities exceeding £41,000, indicating a lack of liquid resources to meet short-term obligations.
• Leverage and Solvency Risk: Long-term creditors of £355,000 secured on company assets represent a high level of indebtedness relative to shareholders’ funds, raising questions on the sustainability of capital structure.
• Operational Uncertainty: Being newly incorporated (June 2024) with no trading history and minimal current assets apart from investment in subsidiaries (£450,000), the company’s operational viability and cash generation capacity remain unproven.

3. Positive Indicators:

• Compliance: All statutory filings for accounts and confirmation statements are up to date and not overdue, indicating good governance and regulatory compliance.
• Experienced Directors: Both directors have been appointed since incorporation and reside at the company address, suggesting direct oversight and control.
• Going Concern Statement: Directors affirm the company’s going concern status, supported by expected backing from shareholders and creditors.

4. Due Diligence Notes:

• Verify the nature and terms of the £450,000 investment in subsidiaries to assess asset quality and potential income streams.
• Obtain details on creditor agreements, especially security arrangements and repayment terms for the £355,000 long-term debt.
• Review cash flow projections and business plans to evaluate how the company intends to address its negative working capital and leverage soon after start-up.
• Investigate the background and financial strength of the shareholders and directors, given their significant control (25-50% each) and potential financial support.
• Confirm the absence of any contingent liabilities or off-balance-sheet obligations that could impact solvency.