Investment Risk Analysis: MULTIPLAN SERVICES LTD (06353570)

1. Risk Rating: HIGH

Justification: The company operates with an extremely thin capital base (£204 net assets), has experienced a 96% decline in net assets from its 2020 peak (£5,195), and is proposing a dividend (£500) that would render it technically insolvent if paid. The near-absence of any asset buffer makes this company highly vulnerable to even minor adverse events.

2. Key Concerns

Concern 1: Imminent Insolvency Risk from Proposed Dividend

The 2025 accounts show proposed dividends of £500 against net assets of only £204 and a P&L reserve of £194. If this dividend is paid, the company would have negative net assets of approximately £-296, pushing it into technical insolvency. Under the Companies Act 2006, distributions must be made from distributable profits; the legality of this proposed dividend is questionable given the limited reserves available.

Concern 2: Severe Deterioration in Financial Position

Net assets have declined dramatically over recent years: - 2020: £5,195 → 2025: £204 (96% decline) - Cash has fallen from £5,669 (2021) to £1,416 (2025) - The company has no fixed assets whatsoever, meaning there is no asset cushion beyond cash and minimal receivables

The current ratio stands at approximately 1.17 (£1,416 current assets / £1,212 current liabilities), leaving virtually no margin for operational disruptions.

Concern 3: Single-Person Governance with Concentrated Control

Mrs Stanka Nenova Popova holds the positions of sole director and PSC with >75% share ownership and voting rights. This concentration eliminates internal checks and balances, increases key-person dependency risk, and creates potential for decisions that may not serve creditor interests — the proposed dividend being a case in point.

3. Positive Indicators

• Filing Compliance: Both accounts and confirmation statements are current and not overdue. The company has maintained consistent filing over its 18-year history.
• Operational Longevity: Incorporated in 2007, the company has survived multiple economic cycles, suggesting some underlying business resilience.
• Modest Profitability in 2025: The P&L reserve improved from £6 to £194, indicating a profit of approximately £188 for the year, reversing the trend of losses seen in prior years.
• No Trade Creditors in 2025: Trade creditors were eliminated (down from £773 in 2024), suggesting the company is not stretching supplier payments.

4. Due Diligence Notes

1. Dividend Legality: Clarify whether the proposed £500 dividend has been paid and, if so, on what basis it was determined to be a lawful distribution from distributable reserves. Request board minutes documenting this decision.

2. Related Party Transactions: Given the sole director/shareholder structure, investigate whether the creditor balances include any amounts owed to Mrs Popova personally. The accruals of £550 and the overall creditor position may include director loans or related-party balances that are not separately disclosed in the filleted accounts.

3. Revenue and Trading Performance: The filleted accounts filed under the small companies' regime do not disclose turnover or profit and loss figures. Obtain management accounts to assess whether the business generates sufficient revenue to sustain operations and service its obligations.

4. Business Activity Assessment: The SIC code (96090 — Other service activities n.e.c.) is vague. The company was previously named "Multiplan Cleaning Services Limited" before a 2015 name change. Confirm the current nature of trading activity and whether it remains viable at this scale.

5. Accruals Composition: The £550 in accruals (representing 45% of total current liabilities) warrants investigation. Understand what obligations these represent and whether they are recurring or one-time items.

6. Future Trading Intent: Given the precarious financial position, establish whether the director intends to continue trading, wind down operations, or inject additional capital.