3bros Berhad Working Capital Case Study

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Hassan, Harjeet and Henry should raise the working capital through loan capital rather than share capital. Intention to expand the business, Hassan, Harjeet and Henry need to raise RM2 million working capital but none of them able to contribute any capital on right issue share for the expansion of business. However, 3Bros Berhad have a retail shop worth RM 3million in Pavilion as Restaurant 1Malaysia which in accordance with Section 21(1) and 21(2) Company Act 2016, company have full power to operate company including in charge of any property and to do any action that may enter into a transaction. Therefore, this is the way that enables 3Bros Berhad raise funds due to fulfill the requirement of that Act. (having retail shop) Through applying bank loan, they are able to remain their ownership of the company and at the same time, they raised their capital by getting financial aid. Loan provider is considered as an outsider of the company since the nature of lending money is not for share acquisition. By doing so, they can be their own boss, need not to satisfy any requirement requested from others and also have the freedom to make the decision that crucial their business to success. When their company…show more content…
By doing this, they have the full power to make any important decision such as acquiring other company to be their subsidiary and how to expand their business. So, the management may save up a lot of time in preparing presentation slide to explain current states of the company and current projects planning to run. For sure, if there is shareholders, before holding the meeting, satisfying them with quality meals will increase the company’s expenses. Without having shareholders help 3Bros Berhad to reduce expenditure and tax

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