SOUND COLLECTIVE PROJECTS LIMITED

Executive Summary

Sound Collective Projects Limited is a micro-entity engaged in sound recording and music publishing with timely regulatory filings and modest improvement in net assets. Nevertheless, liquidity constraints, a very low equity base, and limited operational scale present moderate risk factors warranting further financial and operational due diligence before investment consideration.

SOUND COLLECTIVE PROJECTS LIMITED - Analysis Report

Company Number: 13268931

Analysis Date: 2025-07-20 18:17 UTC

1. Risk Rating: MEDIUM

Justification: The company is operational with current filings up to date and shows modest net asset growth, indicating some financial stability. However, historical and recent financials reveal liquidity constraints and low equity, which elevate risk modestly.

2. Key Concerns:

• Liquidity Position: The company reported negative net current assets in prior years (2022 and 2023) before reversing to a positive £1,264 in 2024, but creditor and accrual balances remain relatively high, suggesting ongoing working capital pressures.
• Low Share Capital and Equity: Share capital remains nominal (£1.00), and shareholders’ funds are low (£659 in 2024), implying limited financial buffer to absorb losses or fund growth.
• Single Director and Employee: The company operates with one director and one employee (the director), which may indicate limited operational capacity and higher key-person risk.

3. Positive Indicators:

• Up-to-date Compliance: All statutory accounts and confirmation statements are filed on time with no overdue filings, indicating good regulatory compliance.
• Improving Net Assets: The net assets increased from £128 in 2023 to £659 in 2024, reflecting a positive movement in financial health.
• Micro-entity Reporting: The company benefits from small company reporting exemptions, reducing administrative burden and costs.

4. Due Diligence Notes:

• Review detailed cash flow statements and creditors aging to assess liquidity trends more granularly.
• Obtain insight into the company’s revenue streams and contracts to evaluate operational sustainability given the small team and low capital base.
• Confirm any related party transactions or director loans which may impact the financial position or liquidity.
• Investigate the nature and terms of accruals and deferred income totaling £3,120 to understand potential future cash outflows or obligations.