Company Number: 13629527

Analysis Date: 2025-07-29 18:29 UTC

1. Risk Rating: MEDIUM

Justification: The company is relatively young (incorporated 2021), with modest positive net current assets and shareholders’ funds that have increased year-on-year from £25,896 in 2021 to £46,155 in 2024. However, the company’s liquidity appears constrained with very low cash balances relative to high trade debtors and current liabilities. The absence of an audit and limited financial information restricts the depth of analysis but no immediate insolvency indicators are present.

2. Key Concerns:

• Liquidity Risk: Cash at bank is extremely low (£832 in 2024) compared to significant current liabilities (£681,568) and high trade debtors (£681,343), indicating potential cash flow pressure and reliance on debtor collection to meet short-term obligations.

• Concentration of Control and Governance: Both directors, Mr John Edward Bonar and Mrs Penny Bonar, hold 25-50% shares and voting rights each, suggesting closely held ownership which may limit governance oversight. No company secretary is appointed, which may increase compliance risk.

• Related Party Transactions: There are substantial related party balances (£240,001 owed in 2024), which could imply reliance on related parties for funding or operational support, raising questions about the sustainability and arm’s length nature of such transactions.

3. Positive Indicators:

• Positive Working Capital and Equity Growth: Net current assets and shareholders’ funds have steadily increased each year indicating improving balance sheet strength within the small scale of operations.

• Up-to-date Filings: The company’s accounts and confirmation statements are filed on time without overdue filings, suggesting compliance with statutory obligations.

• Going Concern Statement: Directors explicitly state confidence in the company’s ability to continue as a going concern, and the financial statements were prepared accordingly.

4. Due Diligence Notes:

• Investigate the nature and collectability of trade debtors, which constitute almost the entire current assets, to assess risk of bad debts and impact on liquidity.

• Review details of related party transactions to understand their terms, purpose, and impact on the company’s financial position.

• Obtain management accounts or cash flow forecasts to evaluate short-term liquidity management given low cash balances.

• Consider any contingent liabilities or off-balance sheet commitments not disclosed in the limited financial statements.

• Assess directors’ backgrounds and related party relationships for potential conflicts of interest or governance concerns.

• Verify whether the company’s activities under SIC code 96090 ("Other service activities not elsewhere classified") align with disclosed operations and revenue recognition policies.