Company Number: 13132791

Analysis Date: 2025-07-29 19:03 UTC

1. Risk Rating: HIGH
   TEC STYLE LTD exhibits a significant deterioration in its financial position as of the latest accounts (year ended 31 January 2025) with net current liabilities and negative net assets. This indicates a solvency risk, as current liabilities exceed current assets, and shareholders' funds have turned negative, signaling potential distress.

2. Key Concerns:

• Negative Net Assets and Net Current Liabilities: The company moved from positive net assets of £6,195 in 2024 to negative net assets of £1,856 in 2025, with current liabilities increasing substantially to £7,919 from £1,866. This deterioration suggests cash flow or operational difficulties.
• Increased Creditors, Particularly Taxes and Social Security: Creditors rose from £1,866 to £7,919, driven largely by a jump in taxes and social security liabilities (£3,549 vs. £413), implying possible delayed payments or tax arrears.
• Reliance on Directors' Loans Previously and Changes in Director Appointments: Directors’ loans of £1,103 were present in 2024 but absent in 2025, which could indicate a withdrawal or restructuring of internal financing. Additionally, the founder director resigned and a new director was appointed on the same day, which may warrant review for governance stability.

3. Positive Indicators:

• Timely Filing and Compliance: Accounts and confirmation statements are up to date with no overdue filings, indicating regulatory compliance.
• Consistent Small Company Reporting: The company qualifies for and has filed under the small companies regime with exemption from audit, which is consistent with its size and simplifies compliance.
• Stable Workforce: The average number of employees has remained steady at 3 over the last two years, suggesting operational consistency.

4. Due Diligence Notes:

• Investigate the reasons for the sharp increase in current liabilities, especially tax and social security obligations, and confirm whether these are being addressed or pose a risk of enforcement action.
• Review cash flow statements (if available) or bank statements to assess liquidity pressures, given the decline in cash from £4,303 to £2,868 and the negative working capital.
• Clarify the nature and implications of the director changes, including the resignation of the founder director and the ownership/control dynamics between the two named persons with significant control.
• Examine any related party transactions, particularly regarding loans from directors and whether funding arrangements have changed.
• Assess the business model sustainability in the retail mail order/internet sales sector, particularly given the financial weakening and absence of fixed assets or other long-term assets.

Executive Summary:
TEC STYLE LTD has experienced a notable decline in financial health over the latest reporting period, moving from positive net assets to a net liability position driven by increased current liabilities and reduced liquidity. While the company remains compliant with filing requirements and maintains a stable workforce, the significant rise in creditors, especially tax-related, and the negative working capital position highlight solvency and liquidity risks that warrant further investigation. These factors collectively suggest elevated financial risk for investors at this stage.