TSL TECHNICAL LTD

Executive Summary

TSL Technical Ltd, a newly incorporated engineering consulting company, currently faces high financial risk due to significant liquidity shortfalls and negative equity in its first year. While compliant with regulatory filings and operationally active, the substantial tax liabilities and dividend payments despite losses highlight potential sustainability and governance concerns that warrant further detailed investigation.

TSL TECHNICAL LTD - Analysis Report

Company Number: SC757090

Analysis Date: 2025-07-29 15:06 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks as evidenced by net current liabilities of £37,965 against current assets of only £4,335 and cash of £328. Shareholders' funds are negative at £38,065, indicating an erosion of equity and impaired financial position in its first year of trading.

2. Key Concerns:

• Severe liquidity shortfall: Current liabilities of £42,300, largely tax and social security related, far exceed the available current assets, posing immediate cash flow pressures.
• Negative equity and net assets: Shareholders’ funds show a material deficit, signaling cumulative losses or undercapitalization which threatens ongoing viability.
• High director dividends despite losses: £107,000 dividends paid to directors during the first year despite negative net assets raise governance and sustainability questions.

3. Positive Indicators:

• The company is compliant with filing deadlines and currently active, showing no regulatory or administrative red flags.
• The business operates in a specialised engineering consulting field (SIC 71122), which can have stable demand if managed well.
• Directors appear to be actively involved with clear control structure and no disqualifications noted.

4. Due Diligence Notes:

• Investigate the nature of the £42,011 tax and social security creditor to confirm if these are deferred payments or disputed liabilities.
• Review cash flow forecasts and working capital management plans to understand how the company intends to address the liquidity gap.
• Clarify the rationale and legality of dividend payments amid negative equity and assess the impact on financial stability.
• Assess the business model and revenue pipeline given that the company is in its first year and currently shows no profit data disclosed.
• Confirm the director’s current account arrangements and related party transactions for governance transparency.