MODERN FUNKTION LIMITED

Executive Summary

MODERN FUNKTION LIMITED demonstrates significant financial distress with worsening negative net assets and inadequate liquidity to cover current liabilities. While the company remains compliant with filing requirements and has a clear ownership structure, the lack of revenue and employees raises concerns about operational viability. Further investigation into creditor composition, business activity, and funding strategies is essential to evaluate its ongoing sustainability.

MODERN FUNKTION LIMITED - Analysis Report

Company Number: 13158854

Analysis Date: 2025-07-20 18:07 UTC

1. Risk Rating: HIGH
   The company exhibits a significant negative net asset position, worsening year-over-year, indicating serious solvency concerns. Current liabilities substantially exceed current assets, suggesting acute liquidity risk. The absence of turnover and employees further raises questions about operational sustainability.

2. Key Concerns:

• Severe Negative Equity: Net assets declined from approximately -£5k in 2023 to -£30.6k in 2024, showing deteriorating financial health and potential insolvency risk.
• Liquidity Shortfall: Current liabilities (£31,790) far exceed current assets (£1,211) as of January 2024, with negligible cash resources, implying difficulty meeting short-term obligations.
• No Reported Turnover or Employees: The company reports no turnover or employees, which questions the viability of ongoing operations and revenue generation capacity.

3. Positive Indicators:

• Compliance with Filings: The latest accounts and confirmation statement filings are up to date with no overdue status, indicating regulatory compliance and good governance in statutory duties.
• Established Shareholder Control: The company is controlled by a single PSC holding 75-100% shares and voting rights, which may facilitate swift decision-making and potential recapitalization if needed.
• Clear Accounting Policies: The accounts note adherence to applicable UK accounting standards (FRS 102 Section 1A), and the company has opted for exemption from audit consistent with small company status.

4. Due Diligence Notes:

• Investigate Nature of Creditors and Directors’ Loans: The significant increase in creditors and director loan accounts requires review to understand terms, related party exposure, and potential repayment risks.
• Confirm Business Model and Revenue Streams: Clarify the absence of turnover and employees despite activity classifications including wholesale and music-related activities, to assess ongoing business operations or dormancy.
• Assess Funding Plans or Capital Injection: Given the large negative equity and liquidity shortfall, verify any plans for new funding, shareholder support, or restructuring to ensure continuity.
• Review Director Resignations: Two directors resigned in July 2024; assess the impact on management stability and governance.