Company Number: 12540030

Analysis Date: 2025-07-29 14:05 UTC

1. Risk Rating: HIGH
   Despite being an active private company limited by guarantee, Sew Fit Ltd exhibits significant financial distress indicators. The company has persistently negative net current assets over the past five years, reaching -£5,923 as at 31 March 2025, indicating liquidity issues. The net assets dropped sharply from £4,025 in 2024 to only £177 in 2025, evidencing erosion of the company's equity base and raising solvency concerns.

2. Key Concerns:

• Liquidity Deficit: The company’s current liabilities consistently exceed current assets by a large margin, with zero current assets reported for 2025, suggesting it may struggle to meet short-term obligations.
• Diminishing Net Assets: A steep decline in net assets from £4,025 in 2024 to £177 in 2025 signals potential solvency risk and depletion of reserves.
• Reliance on Director Advances: The company owes £1,461 to the director as an interest-free loan repayable on demand, which could impact financial flexibility if repayment is requested or if the director withdraws support.

3. Positive Indicators:

• No Overdue Filings: Accounts and confirmation statements are filed on time, indicating regulatory compliance and maintained good standing with Companies House.
• Stable Directorship: The sole director, Mr. Ahmad Anwari, has been in place since incorporation and holds full control, providing consistent leadership.
• Micro-entity Status: Eligibility for the micro-entity reporting regime reduces administrative burden and audit requirements, appropriate for a small scale operation.

4. Due Diligence Notes:

• Investigate Cash Flow: Detailed cash flow analysis is needed to understand how the company manages day-to-day liquidity given negative working capital and no current assets reported.
• Examine Business Model and Revenue Streams: The accounts do not disclose profit and loss information; understanding operational performance and sustainability is critical.
• Director Loan Terms and Repayment Plans: Review the nature and timing of director’s advances and their impact on solvency or potential conflicts of interest.
• Assess Fixed Asset Valuation: Fixed assets have declined over the years; it is important to verify their recoverable value and usage in ongoing operations.
• Future Funding Arrangements: Clarify whether the company has access to additional funding or capital injections to mitigate liquidity risk.