Company Number: 15161831

Analysis Date: 2025-07-20 18:55 UTC

1. Risk Rating: HIGH
   The company exhibits a negative net asset position shortly after incorporation, indicating solvency concerns. Net current liabilities substantially exceed current assets, suggesting liquidity challenges. Given the business is newly formed and operating in a competitive hospitality sector, operational stability is uncertain.

2. Key Concerns:

• Negative Net Assets: Net liabilities of £3,229 after the first financial year indicate the company is technically insolvent on a balance sheet basis.
• Working Capital Deficit: Current liabilities (£49,860) greatly exceed current assets (£6,714), producing a net current liability of £43,146, which implies potential cash flow difficulties to meet short-term obligations.
• Business Sustainability: As a micro-entity in the licensed restaurant sector with only four employees, the company is exposed to operational risks inherent in hospitality, especially with limited financial buffer.

3. Positive Indicators:

• No Filing Overdue: The company has complied with annual accounts and confirmation statement deadlines, indicating governance discipline.
• Directors’ Control and Involvement: Both PSCs are also directors actively involved in management, which may facilitate agile decision-making and focused oversight.
• Micro-Entity Reporting: Utilization of micro-entity accounting standards simplifies compliance and reduces administrative burden, appropriate for a small startup.

4. Due Diligence Notes:

• Investigate the cause of the negative equity position—whether due to initial setup costs, operating losses, or other factors.
• Review the company’s cash flow forecasts and banking arrangements to assess liquidity management and ability to meet short term liabilities.
• Understand the nature of current liabilities to determine if any are overdue, related party loans, or trade creditors, which may influence risk.
• Confirm the business model viability in the licensed restaurant sector, especially in the local market of Sittingbourne.
• Obtain management accounts or other interim financial data if available to assess current trading performance beyond the year-end accounts.