THE CRAFTED CODE LTD
Executive Summary
The Crafted Code Ltd is a newly incorporated micro-entity showing negative net assets and working capital deficits, indicating a high risk of solvency and liquidity challenges at this stage. While compliance with filing requirements is current and the company operates in a potentially scalable IT/design sector, limited financial history and ownership concentration warrant thorough due diligence before investment consideration.
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This analysis is opinion only and should not be interpreted as financial advice.
THE CRAFTED CODE LTD - Analysis Report
Risk Rating: HIGH
Given the company’s negative net current assets and net liabilities of £1,417 shortly after incorporation, along with its micro-entity status and very limited financial history, there is a high risk concerning solvency and liquidity at this early stage.Key Concerns:
- Negative Net Assets and Working Capital Deficit: The company shows net current liabilities of £1,417 and net assets of -£1,417, suggesting it is currently unable to cover short-term obligations with available assets.
- Early Stage and Limited Financial History: Incorporated only in February 2023 with just one set of micro-entity accounts filed, there is insufficient operating history to assess sustainability or growth prospects.
- Ownership and Control Concentration: Four individuals each control 25-50% of shares and voting rights, including directors and secretary. This concentration could pose governance risks if conflicts arise, though no misconduct is evident.
- Positive Indicators:
- No Overdue Filings or Compliance Issues: Both accounts and confirmation statement filings are up to date, indicating regulatory compliance and good governance practices so far.
- Industry Focus on IT and Design: The company operates in specialized design and software development sectors (SIC codes 74100, 62020, 62012, 58290), which have growth potential if the business model succeeds.
- Small Employee Base: With only 2 employees on average, fixed costs may be low, allowing flexibility to scale cautiously.
- Due Diligence Notes:
- Verify sources of funding and cash flow projections addressing the working capital deficit and negative net assets.
- Investigate business plan viability and client pipeline given the very early stage of operations.
- Examine relationship and agreements among the four significant controllers to understand governance dynamics and decision-making processes.
- Confirm absence of director disqualifications or adverse records beyond the publicly available data.
- Review subsequent filings after 28 February 2024 for any material changes in financial position or trading status.
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