Company Number: OC431940

Analysis Date: 2025-07-29 14:53 UTC

1. Risk Rating: MEDIUM
   The company demonstrates a positive net asset position and adequate working capital, but there is a noticeable decline in net assets and current assets compared to the previous year, coupled with a reported loss for the year. The reliance on member loans classified as liabilities also introduces some financial risk.

2. Key Concerns:

• Declining Net Assets: The net assets decreased from £367,856 in 2023 to £258,836 in 2024, indicating potential erosion of capital.
• Reduction in Current Assets and Debtors: Current assets fell significantly from £443,918 to £322,721, with trade debtors dropping sharply, which may signal weakening revenue or collection issues.
• Loss Reported and Member Loan Dependence: The LLP reported a loss of £55,345 and maintains substantial loans from members (£258,836), which are repayable within one year and rank equally with ordinary creditors, potentially impacting liquidity if members demand repayment.

3. Positive Indicators:

• Positive Net Current Assets: The LLP maintains a healthy level of net current assets (£224,129), suggesting it can meet short-term obligations.
• Cash Position Improved: Cash at bank increased from £102,905 to £136,690, which supports operational liquidity.
• Compliance and Filing: There are no overdue filings; accounts and confirmation statements are up to date, indicating good regulatory compliance.
• No Audit Requirement: The LLP is classified as small and has complied with the exemption from audit, reducing administrative burden.

4. Due Diligence Notes:

• Investigate the cause of the significant decline in debtors and current assets to assess if this is due to reduced sales, write-offs, or other operational issues.
• Review the sustainability of member loans and the terms of their repayment, including any risk of calls for repayment that could strain liquidity.
• Examine the operational performance leading to the loss and the LLP’s plans for returning to profitability.
• Confirm the valuation and impairment policy for tangible and intangible assets to ensure asset values are fairly stated.
• Assess the LLP’s farming activities (principal business) and any sector-specific risks that might impact financial stability.