MJ AUTOMOBILE LTD
Company number 08540338 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Investment Risk Analysis: MJ AUTOMOBILE LTD
1. Risk Rating: HIGH
The company presents significant solvency concerns having operated with negative net assets throughout its entire observable financial history (10 years). The deficit has grown substantially from approximately -£13,767 in 2015 to -£150,180 in 2025, indicating persistent accumulated losses. Current liabilities exceed current assets by more than 2:1, creating material going concern questions.
2. Key Concerns
Concern 1: Technical Insolvency and Deteriorating Capital Position
The company has been technically insolvent every year since at least 2015. Net assets have deteriorated from -£13,767 to -£150,180 over the decade—an approximately tenfold increase in the deficit. Shareholders' funds are deeply negative at -£150,180 against nominal share capital of just £100. The company is entirely dependent on creditor forbearance and potentially director support to continue trading.
Concern 2: Critical Working Capital Deficit
Current liabilities (£218,796) exceed current assets (£100,464) by £118,332. The company cannot meet its short-term obligations from its current asset base. While the used car sector typically carries significant creditor balances (stock finance arrangements), the scale of this deficit relative to total assets is concerning. Fixed assets are negligible at £896, meaning there is minimal asset backing for creditors.
Concern 3: Limited Financial Transparency
As a micro-entity, the company files abbreviated accounts with no profit and loss statement, no cash flow statement, and minimal notes. The P&L reserve movement is not disclosed, making it impossible to assess trading profitability, margins, or the rate of cash burn. The accounts are also unaudited, reducing assurance on the figures presented.
3. Positive Indicators
- Longevity: The company has been active for over 11 years since incorporation in May 2013, suggesting some operational viability and creditor tolerance despite the balance sheet position.
- Regulatory Compliance: Accounts and confirmation statements are filed on time with no overdue filings noted. The latest accounts were authorised by the board on 30 January 2026 for the period ending 30 April 2025.
- Slight Liability Reduction: Total liabilities decreased from £231,374 (2024) to £218,796 (2025), a reduction of approximately £12,578, suggesting some deleveraging. However, net assets still deteriorated by £9,667 due to the larger proportional decline in total assets.
- Industry Norms: The used car sector characteristically operates with high creditor balances driven by stock finance facilities, which may partially contextualise the liability levels.
4. Due Diligence Notes
| Item | Investigation Required |
|---|---|
| Going Concern Basis | The accounts contain no explicit going concern statement or director assessment. Given the persistent negative net assets, clarification is needed on whether directors have assessed going concern and what assumptions underpin their assessment. |
| Director Loans & Support | It is common for companies in this position to be supported by director loans. The micro-entity accounts do not disclose related party balances. Determine whether director loans exist, their terms, and whether they are subordinated. |
| Creditor Composition | The split between trade creditors, stock finance, and other liabilities is not visible. Understanding whether liabilities include HP/stock finance (secured on vehicle inventory) versus unsecured trade creditors is critical for assessing recovery risk. |
| PSC Disclosure Anomaly | Mr Seyed Mirmiran's PSC entry shows both "Owns between 25% and 50%" and "Owns between 50% and 75%" of shares, which appears contradictory. Clarification should be sought on the actual ownership structure and whether different share classes exist. |
| Trading Name | The company trades as "KJ Pestige" (likely intended as "Prestige"). Verify whether this trading name is properly registered and whether any associated assets or liabilities exist under this name. |
| CCJ and Litigation History | Given the creditor exposure, a County Court Judgment search and review of any charging orders or statutory demands against the company is recommended. |
| Vehicle Stock Quality | With current assets of £100,464 and minimal fixed assets, the asset base is likely dominated by vehicle inventory. Assess whether stock valuations are realistic and whether any encumbrances exist. |
| 2022 Financial Year | No data is provided for the year ending 2022, creating a gap in the financial history. Determine whether accounts were filed for this period and what the position was. |