PRACTICE TAX LTD

Executive Summary

The company, newly established and small in scale, currently exhibits a weak financial position with negative net assets and limited liquidity. While it is compliant with filing requirements and has invested in intangible assets, the absence of profitability data and the working capital deficit represent significant risks to operational stability and solvency. Further financial and operational due diligence is recommended before considering investment.

PRACTICE TAX LTD - Analysis Report

Company Number: 14705166

Analysis Date: 2025-07-29 19:54 UTC

1. Risk Rating: HIGH
   The company shows a negative net asset position with net liabilities of £397, indicating solvency concerns. The current liabilities (£4,323) significantly exceed cash (£590), suggesting liquidity risk. Furthermore, the company is newly established (incorporated March 2023) with limited financial history and minimal operating scale (one employee), which increases operational risk.

2. Key Concerns:

• Negative net assets and net current liabilities of £3,733 indicate the company may struggle to meet short-term obligations.
• Very limited cash reserves (£590) versus current liabilities (£4,323) pose liquidity challenges.
• Lack of turnover and profit data (accounts are abridged and income statement not filed) restricts assessment of operational sustainability.

3. Positive Indicators:

• Director and sole significant controller is clearly identified with no adverse records, suggesting stable governance at the management level.
• Company is compliant with filing deadlines with no overdue returns or accounts, showing regulatory compliance.
• Intangible fixed assets (£3,336) relate to capitalized development expenditure, potentially indicating investment in proprietary technology or intellectual property.

4. Due Diligence Notes:

• Investigate the nature and recoverability of the intangible fixed assets (development costs) given no amortisation charged and the very long amortisation period (100 years).
• Obtain detailed income statement or management accounts to assess revenue generation and profitability trends.
• Clarify the company's business model and cash flow projections to determine operational viability and funding requirements.
• Confirm no undisclosed contingent liabilities or related party transactions that could impact solvency.
• Review director’s plans for addressing working capital deficit and ongoing funding sources.