PATEL BUILDING SERVICES LIMITED

Executive Summary

Patel Building Services Limited shows a concerning financial position marked by negative net assets and accrued liabilities exceeding current assets, suggesting solvency and liquidity risks. While regulatory compliance is maintained and the company remains active, the minimal capitalization and small operational scale highlight challenges in sustaining business operations. Further due diligence is advised focusing on cash flows, liability nature, and business viability to fully understand risk exposure.

PATEL BUILDING SERVICES LIMITED - Analysis Report

Company Number: 13152188

Analysis Date: 2025-07-20 16:29 UTC

1. Risk Rating: HIGH

   Justification: The company exhibits negative net assets and capital reserves as of the latest financial year, indicating insolvency on a balance sheet basis. The reported accrued liabilities exceed current assets substantially, and the net asset position has deteriorated compared to prior years, signaling worsening financial health. The company is a micro-entity with minimal financial disclosures, limiting transparency for deeper assessment.

2. Key Concerns:

   • Negative Net Assets: As of 31 January 2024, net assets are reported at -£101, a decline from -£934 the previous year, reflecting persistent and material capital erosion.

   • Accrued Liabilities Exceed Current Assets: Accrued liabilities stood at £791 against current assets of only £690, indicating possible liquidity stress and insufficient short-term resources to cover obligations.

   • Minimal Share Capital and Operational Scale: With only £1 share capital and a single employee (the director), the company appears very thinly capitalized and operationally limited, raising concerns about sustainability and capacity to manage project risks in a building development sector.

3. Positive Indicators:

   • Compliance with Filing Requirements: The company is up to date with both annual accounts and confirmation statement filings, demonstrating regulatory compliance and governance diligence.

   • Active Status and No Liquidation: The company remains active and is not undergoing any formal insolvency processes such as liquidation or administration.

   • Consistent Director and Address: The sole director has been in place since incorporation, providing continuity in management.

4. Due Diligence Notes:

   • Examine Detailed Cash Flows and Creditors: Review cash flow statements and creditor aging if available to assess immediate liquidity pressures beyond the balance sheet snapshot.

   • Investigate Nature and Timing of Accrued Liabilities: Clarify whether accrued liabilities reflect trade payables, tax obligations, or contingent liabilities that might impact solvency risks.

   • Assess Business Model and Revenue Streams: Given the development of building projects SIC code and micro-entity status, evaluate contract pipelines, client diversification, and project margins to understand operational viability.

   • Director Background and Related Party Transactions: Investigate director’s financial standing and any related party dealings that could influence company risk.

   • Monitor Future Financial Performance: Given the negative equity trend, ongoing monitoring of subsequent financial filings is critical to detect any deterioration or turnaround.