Company Number: SC756528

Analysis Date: 2025-07-29 18:38 UTC

1. Risk Rating: HIGH
   The company demonstrates significant financial distress with net liabilities of £266,814 within its first financial period. Current liabilities of £414,027 far exceed current assets of £102,421, resulting in a substantial working capital deficit. The high reliance on related party funding, unremunerated director loans, and negative equity indicate material solvency risk.

2. Key Concerns:

• Negative Net Assets and Working Capital Deficit: Net liabilities of £266,814 and a net current liability position of £311,606 reflect a precarious financial position that may undermine the company’s ability to meet short-term obligations.
• High Level of Creditors Due Within One Year: £414,027 in current liabilities, including £130,169 owed to related parties and £10,801 bank overdraft, imposes immediate repayment pressure.
• Dependence on Interest-Free Director Loan: The company owes the director £96,620 with no repayment terms, indicating informal financing that may not be sustainable or legally enforceable.

3. Positive Indicators:

• Current Active Status and Compliance: The company is active, with no overdue accounts or confirmation statements, demonstrating compliance with statutory filing requirements.
• Clear Ownership and Control: Single person with significant control (PSC) owning 75-100% shares and voting rights, providing clear governance structure and decision-making authority.
• Initial Asset Base: The company holds tangible and intangible assets valued at £44,792, including goodwill, which may support future operations.

4. Due Diligence Notes:

• Review Cash Flow Projections and Funding Plans: Investigate management’s strategy to address the significant working capital deficit and how they plan to meet creditor obligations as they fall due.
• Evaluate Related Party Transactions: Scrutinize the nature, terms, and sustainability of amounts owed to related parties and the director loan to assess risks of informal financing.
• Assess Going Concern Assumptions: Despite the director’s assurances, verify whether adequate financial support or operational improvements exist to ensure the company’s viability over the next 12 months.