Company Number: SC684300

Analysis Date: 2025-07-20 15:41 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, indicated by persistent negative net assets and substantial current liabilities exceeding current assets by a wide margin. The reliance on director loans to fund operations further increases financial vulnerability.

2. Key Concerns:

• Negative Net Assets and Shareholders' Funds: At the end of 2023, net assets stood at -£17,190, worsening from -£13,292 the previous year, indicating ongoing accumulated losses and erosion of equity.
• Severe Working Capital Deficit: Net current liabilities are substantial (£123,614 in 2023), which suggests the company may struggle to meet short-term obligations as current liabilities exceed current assets by a large amount.
• Dependence on Director Loans: The director’s loan account increased dramatically from approximately £10k to over £96k within the year, highlighting dependence on unsecured, interest-free loans from the director to sustain operations, which may not be sustainable or legally robust long term.

3. Positive Indicators:

• Active Status with Up-to-Date Filings: The company is active, with no overdue accounts or confirmation statements, demonstrating regulatory compliance and proper corporate governance in terms of filing obligations.
• Growth in Investment Property Value: Fixed assets (investment properties) increased from £74,720 in 2022 to £106,424 in 2023, which may indicate asset acquisition or revaluation contributing to potential future value.
• Single Director with Full Control: Simplified governance structure with a single director who is also the sole shareholder, reducing complexity in decision-making.

4. Due Diligence Notes:

• Investigate the nature and terms of related party loans, including the director’s loan and the £15,000 loan from the director’s spouse, to assess repayment likelihood and any contingent liabilities.
• Review cash flow projections and plans for addressing the working capital deficit to evaluate operational sustainability.
• Assess the fair value determination process for investment properties to confirm whether asset valuations are realistic and support future liquidity or borrowing capacity.
• Confirm whether there are any covenant breaches or legal proceedings related to the company’s debt structure.