SAPPHIRE KHD LIMITED

Executive Summary

Sapphire Khd Limited is a recently incorporated micro private limited company with minimal capitalization and negative working capital, signaling significant liquidity and solvency risks at this early stage. Its compliance with filing requirements and clear ownership structure are positive governance factors; however, the company’s operational sustainability and financial viability require careful scrutiny. Further due diligence is recommended to assess its business prospects and funding strategy.

SAPPHIRE KHD LIMITED - Analysis Report

Company Number: 15033563

Analysis Date: 2025-07-29 20:42 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits negative net current assets (£-712), indicating liquidity issues. Total assets less current liabilities stand at only £1, and shareholders’ funds are minimal (£1), reflecting very limited capitalization. Given the company was incorporated recently (July 2023) and its financials show minimal operations and reliance on director advances, it faces significant solvency and operational risks.

2. Key Concerns:

• Negative working capital: Current liabilities (£10,266) exceed current assets (£9,554), suggesting potential difficulty meeting short-term obligations as they fall due.
• Minimal equity base: Shareholders’ funds of £1 and total net assets of £1 highlight a weak capital structure that may not support sustainable operations or absorb losses.
• Reliance on director advances: The director has provided advances (£183), indicating external funding from management rather than external investors or operational cash flow, which raises concerns about financial independence and sustainability.

3. Positive Indicators:

• Compliance with filing obligations: The company is up to date with both accounts and confirmation statement filings, indicating proper regulatory compliance and governance at this early stage.
• Clear ownership and control: A single director and 75-100% shareholder (Mrs. Sapphire Hayden-Delaney) provides straightforward governance and decision-making structure.
• Micro entity status: The company is small with limited filing requirements, which may reduce administrative burden and costs.

4. Due Diligence Notes:

• Investigate the nature of the company’s operations, revenue generation, and business plan to assess sustainability beyond the first year of trading.
• Review cash flow forecasts and planned funding sources to understand how the company intends to address its negative working capital and grow equity.
• Confirm absence of contingent liabilities or off-balance-sheet obligations that could exacerbate financial risk.
• Evaluate the director’s financial support capacity and any related party transactions for potential conflicts or risks.