SOLACE MANAGEMENT LTD

Executive Summary

Solace Management Ltd exhibits significant liquidity and solvency risks, primarily driven by negative working capital and a large, growing tax creditor balance. While regulatory compliance and clear ownership structure are positives, the company’s minimal cash reserves and short operating history necessitate further investigation to ascertain financial sustainability and operational stability.

SOLACE MANAGEMENT LTD - Analysis Report

Company Number: 14375327

Analysis Date: 2025-07-29 15:54 UTC

1. Risk Rating: HIGH
   The company demonstrates ongoing net current liabilities, minimal cash reserves, and a rapidly increasing short-term creditor balance, especially taxation liabilities. The low net asset base and negative working capital indicate significant solvency and liquidity concerns.

2. Key Concerns:

• Persistent negative net current assets: The company has net current liabilities of £1,284 as of 2024, showing an inability to cover short-term liabilities with current assets.
• Sharp increase in taxation and social security creditors: Current liabilities surged from £8,154 in 2023 to £52,118 in 2024, largely due to taxation and social security costs increasing from £3,031 to £46,718, suggesting potential cash flow strain or delayed payments to HMRC.
• Minimal cash balance: Cash on hand decreased from £6,550 in 2023 to £1,834 in 2024, which is low given the scale of liabilities due soon, raising concerns about operational liquidity.

3. Positive Indicators:

• Compliance with filings: Accounts and confirmation statements are up to date with no overdue filings, indicating regulatory compliance.
• Ownership and control clarity: The sole director and 100% shareholder is clearly identified, simplifying governance and decision-making.
• Business activity identified: Operating in management consultancy (SIC 70229), a sector with potential for low fixed costs and scalability.

4. Due Diligence Notes:

• Investigate the nature and cause of the large increase in taxation and social security creditors. Confirm whether these are accrued liabilities or overdue payments, and assess payment plans or HMRC negotiations.
• Review debtor balances (£49,000) for collectability and aging to understand if receivables are recoverable and contributing positively to cash flow.
• Evaluate the short operating history (incorporated 2022) for business sustainability, including client contracts, revenue streams, and management plans to improve liquidity.
• Scrutinize any off-balance sheet liabilities or contingent risks not disclosed in filleted accounts.
• Confirm the absence of director disqualifications or governance issues beyond public records provided.