THE PAYMENTS PRACTICE LIMITED

Executive Summary

The Payments Practice Limited is an active private limited company with no current filing or governance issues. However, a significant reduction in net assets and cash, coupled with high related party receivables and loans, raises concerns around liquidity and financial stability. Further due diligence on operational performance and related party transactions is advised to fully assess risk.

THE PAYMENTS PRACTICE LIMITED - Analysis Report

Company Number: 13599789

Analysis Date: 2025-07-20 17:00 UTC

1. Risk Rating: MEDIUM
   The Payments Practice Limited shows a moderate risk profile. While the company is active and compliant with filing requirements, its recent financials indicate a notable decline in net assets and cash reserves, which could impact liquidity and operational stability. The presence of related party loans and concentrated ownership warrants careful monitoring.

2. Key Concerns:

• Significant Decline in Net Assets and Cash: Net assets decreased from £241,586 in 2022 to £60,096 in 2023, with cash reserves dropping sharply from £161,294 to £5,108, suggesting potential liquidity stress.
• High Debtors Concentration with Related Parties: Debtors largely comprise amounts owed by related parties (£69,669 in 2023), which may indicate concentration risk and potential challenges in cash conversion.
• Loans to Related Parties: Substantial unsecured loans to related parties (£34,782 at year-end) could pose repayment uncertainty and affect the company’s working capital.

3. Positive Indicators:

• Compliance and Timely Filings: No overdue accounts or confirmation statements, indicating good regulatory compliance.
• Positive Net Current Assets: Despite reductions, net current assets remain positive at £54,618, reflecting an ability to meet short-term liabilities.
• Stable Ownership and Management: The company has a clear governance structure with a director and secretary in place, and no disqualifications or governance issues reported.

4. Due Diligence Notes:

• Investigate the reasons behind the sharp decline in cash and net assets between 2022 and 2023, including any operational losses or extraordinary expenses.
• Assess the collectability and terms of the related party debts and loans, including the financial health of those related parties.
• Review the company’s revenue trends and profitability, which were not disclosed in the available data, to better understand operational sustainability.
• Confirm whether there are any contingent liabilities or off-balance-sheet obligations not reflected in the financials.
• Evaluate the impact of the director’s advances and repayments on the company’s cash flow dynamics.