THE MIDDLE COFFEE HOUSE LTD

Executive Summary

THE MIDDLE COFFEE HOUSE LTD demonstrates significant solvency and liquidity risks with a negative net asset position and a working capital deficit despite timely regulatory filings. The company’s short operating history and rapid financial deterioration warrant caution. However, aligned shareholder control and operational expansion provide some positive context, meriting further detailed financial and operational due diligence.

THE MIDDLE COFFEE HOUSE LTD - Analysis Report

Company Number: 14500083

Analysis Date: 2025-07-20 15:58 UTC

1. Risk Rating: HIGH
   The company’s latest micro-entity accounts show a negative net asset position of £3,066 as of 31 March 2024, indicating insolvency on a balance sheet basis. The current liabilities significantly exceed current assets, suggesting liquidity stress that may impair the company’s ability to meet short-term obligations.

2. Key Concerns:

• Negative Net Assets & Working Capital Deficit: Current liabilities (£21,407) exceed current assets (£9,195) by £12,212, resulting in negative net assets and potential balance sheet insolvency.
• Short Operating History & Rapid Deterioration: Incorporated in November 2022, the company shows a sharp decline from £100 net assets in 2023 to a negative net asset position in 2024, raising concerns about business viability and operational stability.
• Limited Financial Information: Micro-entity status limits disclosure, and absence of profit/loss details or cash flow data restricts ability to assess underlying causes or future sustainability.

3. Positive Indicators:

• Active Status and Timely Filings: The company is active with no overdue accounts or confirmation statements, indicating current regulatory compliance.
• Growing Workforce: Increase from zero to eight employees suggests operational scaling consistent with a growing business.
• Single Controlling Shareholder with Management Control: Miss Evelyn Rose Emma Searing holds 75-100% shares and voting rights and is also a director, indicating aligned control and possibly decisive management.

4. Due Diligence Notes:

• Obtain detailed profit and loss accounts and cash flow statements to understand operational performance and cash management.
• Investigate the nature and timing of current liabilities to assess whether they represent trade creditors, loans, or other debts.
• Review management plans for addressing the working capital deficit and any financing arrangements or capital injections.
• Consider credit references or supplier feedback to evaluate payment history and ongoing supplier relationships.
• Verify absence of any director disqualifications or legal proceedings affecting company governance.