Harum Manis Corporation Berhad (HMCB) has been engaged successfully in the agricultural business in Kedah for the past twenty years. HMCB is expanding its operations and plans to have three 100% owned subsidiaries representing different business specialisation, which are catering; producing and distributing ice cube; and supplying frozen meat. In the future, HMCB will become an investment company and look after its investment in subsidiaries.

 

The first new company will be registered as ‘HMCB Cool Nation Sdn Bhd,’ which produces and distributes ice cubes. Both Mr. Razman, the director of HMCB, and Ms. Sarah, the secretary, are assigned as the promoters to set up the new company. Mr. Razman is unsure whether the word ‘Nation’ can be included in the company name. Mr. Razman also disagrees with Ms. Sarah on the idea of adopting the constitution as he feels it may give more burden to the officers to oblige with the constitution. He is also unsure about the implications of the three-year lease agreement that he has signed for the commercial refrigeration machines and lorries since the ice cubes business will start its production soon after the company successfully registered with the Companies Commission of Malaysia (CCM).

 

Explain the possibility of HMCB change its business capacity as an investment holding company.