Company Number: 13540533

Analysis Date: 2025-07-29 19:28 UTC

1. Risk Rating: LOW
   RS Solicitors Ltd demonstrates a solid financial position with strong net current assets and net assets growth over recent years. The company maintains a healthy cash balance relative to short-term liabilities and has no overdue filings, indicating good regulatory compliance and operational diligence.

2. Key Concerns:

• Dependency on a relatively small number of directors and significant controllers, which may present governance risks if leadership changes abruptly.
• Amortisation of goodwill is ongoing at a steady rate; impairment risk should be monitored given the nature of legal services and client retention challenges.
• Increase in taxation and social security creditors from £137,882 to £213,447 may warrant scrutiny to ensure timely settlements and avoid cash flow strain.

3. Positive Indicators:

• Strong liquidity position with cash reserves of £580,750 against current liabilities of £352,833 as at 31 October 2024.
• Net current assets improved significantly to £437,817 indicating good working capital management.
• Consistent growth in shareholders’ funds from £100 in 2021 to over £500,000 in 2024 shows capital strengthening and retained profitability.
• Accounts and confirmation statement filings are up to date with no overdue submissions, demonstrating compliance.
• The company operates under the total exemption full account category, indicating transparency in financial reporting for a small company.

4. Due Diligence Notes:

• Review the nature and collectability of amounts recoverable on contracts (£91,332) and other debtors (£28,663) to confirm they are not overstated or at risk of default.
• Examine the build-up of taxation and social security creditors to confirm these liabilities are managed within cash flow capabilities.
• Assess potential impairment risks related to goodwill and the assumptions used for amortisation schedules, especially considering the competitive legal services market.
• Verify continuity plans and governance controls given the concentration of share ownership and directorship among a small group of individuals.
• Confirm the operational resilience of the business given its rapid net asset growth and whether this growth is sustainable.