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.