Company Number: 15089316

Analysis Date: 2025-07-29 21:15 UTC

1. Risk Rating: HIGH
   Shergill Estates Limited exhibits significant solvency and liquidity risks due to its negative net assets and substantial current liabilities exceeding current assets by a large margin within its first financial year.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company reports net assets of -£102,678, indicating liabilities exceed assets, a clear solvency concern early in its lifecycle.
• Severe Working Capital Deficit: Current liabilities (£623,919) far outweigh current assets (£7,306), resulting in a net current liability position of -£616,613, suggesting acute liquidity stress and potential inability to meet short-term obligations.
• Short Operational History with Limited Financial Data: Incorporated in August 2023 and reporting for just over one year, the company’s financial stability and operational sustainability remain unproven, increasing uncertainty.

3. Positive Indicators:

• Active Status with Full Compliance: The company is active, not in liquidation or administration, and has filed accounts and confirmation statements on time, indicating regulatory compliance and governance diligence.
• Ownership and Management Alignment: Both directors are also significant controllers, which may align management incentives with company success.
• Fixed Assets Base: There are fixed assets valued at £513,935, which could provide some collateral or operational foundation.

4. Due Diligence Notes:

• Investigate the composition and nature of current liabilities (€623,919) to understand whether these are supplier debts, loans, or other obligations and the terms for repayment.
• Clarify the valuation and liquidity of fixed assets (£513,935) to assess their potential to cover liabilities or be monetized if needed.
• Review cash flow projections and business plans to ascertain how the company intends to address its negative working capital and equity position.
• Confirm if there are any contingent liabilities or off-balance-sheet obligations not reflected in the accounts.
• Evaluate credit terms and relationships with creditors, particularly given the liquidity strain.
• Assess the directors’ experience and track record in managing real estate businesses under financial stress.