PATCHY LTD

Executive Summary

PATCHY LTD is a newly incorporated micro-entity with a negative equity position funded by long-term creditors and no reported assets or employees. While compliant with filing requirements, the company currently exhibits high solvency and liquidity risk with limited operational activity. Further due diligence is recommended to understand financing arrangements and plans for sustainable business development.

PATCHY LTD - Analysis Report

Company Number: SC811621

Analysis Date: 2025-07-29 12:07 UTC

1. Risk Rating: HIGH

   Justification: The company shows a negative shareholders’ equity position (£-1,995) with creditors due after one year of the same amount, indicating reliance on long-term liabilities rather than equity financing. It has no current assets reported and no employees, implying limited operational activity and no internal cash generation capacity. The company is very new (incorporated May 2024) and has only just submitted its first micro-entity accounts, with minimal financial data available. This combination suggests high solvency and liquidity risk at this early stage.

2. Key Concerns:

   • Negative Shareholders’ Funds & Reliance on Long-Term Creditors: The balance sheet indicates the company is financed by creditors rather than equity, which may constrain financial flexibility.
   • No Reported Assets or Operational Activity: Absence of assets and zero employees raises concerns about the company’s ability to generate revenue or sustain operations.
   • Single Director and PSC with Full Control: While common in start-ups, sole control by one individual may increase governance risk and reduce oversight.

3. Positive Indicators:

   • Timely Filing of Accounts and Confirmation Statement: The company is compliant with statutory filing deadlines, reducing regulatory risk.
   • Clear Ownership and Control Structure: The director and person with significant control are the same individual, simplifying accountability.
   • Micro-Entity Status: The company benefits from simplified reporting requirements, reducing administrative burden in early stages.

4. Due Diligence Notes:

   • Investigate the nature and terms of the creditors falling due after one year, including whether these are related party loans or external financing.
   • Assess any business plans or contracts that indicate future revenue generation potential since no assets or employees are reported.
   • Review director’s background and resources to understand capacity to fund operations or manage growth.
   • Monitor future filings for any changes in financial position, operational activity, or staffing.
   • Confirm the company’s business model and market strategy given the SIC code (media representation services) and initial financial position.