Trading or investment company

Can a private limited trading company (incorporated and trading since 2005 under CA 1985) purchase a non-commercial property for investment purposes as obviously this would then change the principal activity of the company ?? The Memorandum of Association contains standard objects i.e. to carry on business as a general commercial company, to acquire by purchase ........ or to hold ....... any land, buildings ........ for the purposes of or in connection with the Company's business.

So whilst the Memo of Assoc. provides for the purchase of land and buildings this is specifically for the purpose of the Company's business, which in this instance is not the case as the property would have no use or connection with the Company's trading activity.

Would the Memo of Assoc. have to be amended to allow the company to make this purchase or is it simply disallowed ??

The company has the funds to purchase the property without the need to borrow. So if it were to purchase the property would the company be deemed an investment company as oppose to a trading company despite the fact that the company will be continuing to trade ??

How is it determined whether a company is a trading or investment company for tax purposes ?? and what are the tax implications if the company were deemed an investment company for tax purposes ??

The property will be let and so the rental income would be received by the company and subject to CT.

Many thanks

Paul Dorrington