Checking a UK company: common questions

No. Under the small companies regime, the majority of UK companies file what are called filleted accounts, lodging the balance sheet they are required to file while leaving out the profit and loss account. This is legal and extremely common, for most companies you assess you will see no revenue or profit figure at all. It tells you almost nothing about the company’s health; it tells you only that the company is small enough to keep that figure private. The figures that predict whether you will be paid sit on the balance sheet, which every company files. How to assess a company that files no profit figure.

Yes, up to a point. Companies House publishes every UK company’s filing history and accounts at no charge, so anyone can read a company’s balance sheet, see its filing record, and review its directors. What it does not do is interpret any of it: you get the raw documents and have to read them yourself, which takes time and some financial literacy.

No. Checking a limited company is not the same as checking an individual. A company’s accounts, filing history, and directors are matters of public record at Companies House, and you can review them without the company’s knowledge or consent. Permission and notification rules apply to credit-checking people, including sole traders in some cases, but for a registered company the information is already public.

Net assets are everything a company owns set against everything it owes. When the figure is negative, the company owes more than it owns, so even if it sold everything it had, it could not pay everyone back. It is one of the clearest distress signals you can read from a balance sheet, and it sits on the face of the accounts with a minus sign in front of it, so you do not need to calculate anything. A single year of negative net assets is not always fatal, but it is the first thing worth checking before qualifying it.

The current ratio compares what a company can realistically turn into cash within a year against what it owes within that year. A ratio above 1 means short-term resources cover short-term bills; most credit policies like to see around 1.5 or higher for comfort. Below 1 means the bills due this year outweigh the resources to meet them, which is often where cash strain shows up first, well before a company formally fails. Context matters, some business models run tight by nature, but as a rough read, comfortably above 1 is reassuring and below 1 is worth a closer look.

No, “active” simply means the company exists and has met its basic filing requirements; it says nothing about solvency. A company can be active right up until the day it enters liquidation. To judge whether a company can be trusted, you have to read the numbers underneath the status: net assets, liquidity, and filing record.

Stable leadership is a positive signal and tends to correlate with companies that pay their way, but it is no guarantee of financial health. When we scored 100 UK companies that had gone into insolvency, they actually had slightly better director stability than the average trading company; most were steady, founder-run firms that looked fine right up to the end. A familiar face at the top tells you little about the balance sheet underneath. See the study of 100 insolvencies.

Companies House sets filing deadlines and charges penalties for missing them, but plenty of otherwise sound companies file late once. What matters is the pattern: repeated late filing, especially alongside other warning signs like tight liquidity or negative net assets, is part of the picture of a company under strain.