APPENDIX 1

UNIVERSITI TUNKU ABDUL RAHMAN

ACADEMIC YEAR 2019/2020

January 2020 TRIMESTER

UKML1013/UBML1013 CORPORATE AND BUSINESS LAW

GROUP ASSIGNMENT REPORT COVER SHEET

Course Details

Course : Bachelor of International Business (Hons)

Year & trimester of study : Year 1 Sem 3

Tutorial Group : T4

Tutor’s Name : Ms. Lee Sim Kuen

Lecturer’s Name : Ms. Angelina Anne Fernandez

Assignment Details

Due Date : Week 9 - Thursday, 12 March 2020, before 4.00 P.M

Topic : UKML1013/UBML1013 Corporate & Business Law Group

Assignment.

Important Note : Submission of assignment is the responsibility of the

students.

Student’s Details

No. Name Student ID No.

1. Chia Zhi Qing 18UKB02264
2. Kwan Hao Feng 19UKB02020
3. Lam Sim Jean 18UKB02555
4. Lew Yoke Peng 18UKB05176
5. Yeo Khoon Khee 19UKB03019
6. Yong Jian 18UKB01856

Assignment Overall Marks : ____________ / 50 Marks

 Table of content

No Content Page number

1. Review Three (3) academic journal articles 1-6

2. A) Describe the plot of the movie and favorite 6-10

character and what have you learned from this
character that you can practice in your daily lives as
students?

B) Describe THREE (3) scenes in the movie that

your group collectively thought was the best and rank
them

C) Relate what you have learnt as a lesson from this

movie.

3. References 11

4. Appendices 12
Q1 Journal ‘s Review
(1) In the article journal of Legal Personality of Robots, Corporations, Idols and
Chimpanzees: A Quest for Legitimacy Solaiman (2012), stated that robots had slowly and
steadily permitting our life in many aspects such as manufacturing and corporation. The use
of robots in industrial had been increased as the robots have various usages. The industrial
robots are estimated will be employed to work with humans in factories worldwide. Besides,
the usage of service of robot had added that robot can entertain, take care of children and
elderly people, preparing food and so on. There is a serious risk that these robots as co-
workers at work or as comparisons of vulnerable in particular due to they involved in causing
numerous deaths around the world. Even though these robots have more harmful
consequences but they are intended to take over the world. As the robots are harmful, so
people are required the protection from malfunctioning collaborative robots at work. Besides,
this article examines the attributes of personality from legal point of view in exclusion of
moral personality and applies them to corporations and robots which find a rationale for
ascribing legal personality to robots. However, robots’ legal personhood has not been
recognised as yet anywhere. The industrial and services robots do not meet those
personhoods, so it cannot claim for their personality.
The robots do not have the rational creations with the capacity of feelings and willing
that can compare with humans directly. A person that is an entity or ‘human being’ is
recognised by law because they have the rights and duties of human being. Mutual rights and
duties have no relation between a person and a thing such as animal, car or robot. The duty
aims to prevent the consequences which is death. However, the duties of possessors of
actively dangerous things such as industrial robots are imposed by law to prevent from
causing harm. In addition, the weakly autonomous robots and animals behave can sense the
environmental conditions as compared of human direction. The corporate legal personality is
often compared with the robots that encourage the recent legal personality. Moreover, a
corporation is an entity that created by humans and recognised by law as the artificial person
has attribute of personhood.
Robot is a possessor of artificial intelligence (AI) that have five characteristics which
are able to communicate with others, has many external world and internal knowledge, some
degree of creativity and intentionally. Robot are now recognised as a product or property at
law. However, some people argued that the partial or full-fledged personhood of robots with
their characteristics. Robots have been tested that whether it is trustful and can be granted the
rights of essential personhood. Moreover, AI is not a human and also could not conclude AI

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can be granted legal personality after some testing. The robots’ full personality is mainly
based on an analogy between robots and corporations with consider to criminal liability.
Humans will cause the robot’s malfunction that could do harmful things. In addition, the
robots’ criminal liability will lead to separate legal personality as robots have the capacity to
act different types of offences with the needed negligence.
This article stated that the punishment to the robots without having to justify their
legal personality anywhere distinct with corporations. Instead of arguing the robots’ physical
and mental capabilities, but now the industrial and social robots are still a long way to
establish human capabilities. Robots are still lack of critical attributes of personhood such as
interests and desires and criminal liability, so it is still far way to substitute humans in
creative tasks. Furthermore, the current law is not naturally equipped to deal with the
incidents that caused by malfunction of robots, so robots are still treated as products or
property. This is due to robot does not has the capability of legal rights and duties that cannot
meet the judicial interpretations of this essential precondition. Someone think that with
respect to rights and responsibilities, separate legal regulations should be established even if
robots and corporations are compared. Besides, the robots have limited self-control as they
need to update themselves when the system is upgraded especially those used in industrial
and social sectors. It further stated that, if the robots are a separate person, then what is the
point to other persons need to pay for the insurance of robots. The robots that made by
humans are totally different from corporations as robots cannot earn revenue from their
operation and it is not available to bear the liability. The personhood and the rights and duties
are basically attached to human beings. Therefore, robots are insufficient for separate
personhood as decreed judicially and not to be competent to have independent personality.
In conclusion, the robots are being used that have proved sometimes it is dangerous
and their personality become a critical concern around the world. Robots are property or
object and not comparable with the human but can have a better compared to animals. The
industrial and social robots had permit to perform different acts for human. However, they
sometimes will malfunction that lead to enormous harms such as operational mistakes at
some stage, internal defects in manufacturing and all the possible. The supporters of robots'
behaviour depend on the identity of corporations, ignoring the basic understanding that
corporate personality reflects the people behind the body. Robots are viewed as equipment
and humans are legally bound by their actions. human beings should ensure that their actions
are legal. Otherwise, legal persons from either party or both parties can be held responsible
for the consequences, considering the motive and the persons' involvement or wrongdoings in

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a particular situation. At the present, robots are lack of the requirements of personality so it is
unable to be a director in corporation.

(2) According to the journal of Company Law and Autonomous Systems: A Blueprint for
Lawyers, Entrepreneurs, and Regulators, regarding to the ongoing trend of the development
of the technology, the involvement of the artificial intelligent in operating of company is
getting more general. In this journal, the researcher were trying to study the impact between
the autonomous system and the company law or system from four countries. Besides,
researcher would investigate about the implication of legal personality under the usage of
artificial intelligent.
Firstly, the American Limited Liability Company. With a rapid development of ICT
and the AI system, many American companies found ways to insert the self-managed, rule-
bound online commercial services into their business. Some back-end providers like Amazon
and Oracle, are doing so well on pushing the companies to join the online services like e-
commerce, “cloud storage” and “cloud computing” which really show the effectiveness on
operating a company. Perpetual autonomous foundation, the system used to store the data and
keeping the core purpose of the organization. This foundation can maintain the company
running under the fixed mission and core value legally. From the study of the researcher, we
knew that Limited Liability Company law in American has given extremely flexibility toward
the company to build their unique system. Under the legal system of American, the
companies has their freedom to make arrangement and changes following the AI trend, yet in
most of the cases, the AI action can be treat as a “legal person”.
In German, the debate about the issues surrounding the autonomous system and the
company are still continue. Under German law, only the “natural person” is allowed to be a
director of the company, but they will accept a company which only have one person. The
company with consist of only one member can be said that a company which run by an
autonomous system, it is potentially transform into a memberless company. There is four
different dogmatic position respect to the memberless company in German. Some argue that
such entitles are strictly illegal. Some say that the existence of memberless company is
possible. Some argue that the dissolution of the company starts automatically once it has been
transformed into a memberless company and that continuation of the company requires the
passing of a specific solution. Lastly, some say in favor of a mere to start dissolution
proceedings by appointment of a temporary executive director.

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 In Switzerland, an autonomous system cannot be given legal personhood without
human involvement by means of a Swiss stock corporation. At least one natural person acting
as a shareholder. The decision making from the AI is illegal under Swiss law, but under the
natural person directing, the company is allowed to run by the autonomous system. A private
foundation in Swiss must consists of a board of trustees as a supreme governing body. On the
other hand, a foundation with a different purpose on using AI may have a different limitation
on for the legal independence to an autonomous system.
In UK, Limited liability partnership (LLPs) allows the partnership to benefit from
separating legal personality and limited liability. With this arrangement, the autonomous
system which has no legal personality can be powerful. They can interact with other legal
persons directly without human intervention or agency. Due to the flexibility of the LLPs, AI
can functioning just like a natural person. The researchers are concerning whether the UK
government will soon accept the AI can have a legal personhood to replace humans as the
member of the firm.
In the part of the implication of legal personality, firstly, they discussed the
constitutionality. They found three main issues. Do the AI have the right to enjoy the
protection from legal system? Is the AI is trusted to control an organization by its own? Is the
AI have the right to make decision in the company?
Secondly, the informal influence. Although we know most of the cases, the
management level decision making will not influence directly from the AI, the data that
collected in the autonomous system is used in the progress. In the business world, it is very
common for people to use AI to assist in decision making, but we have to be aware about the
influence from the AI. It is the duty of managers to have a clear mind.
Besides, this issue is at the inception phase or the ending phase. Researchers have
stated some problems the legal system are facing and will face in the future. Obviously, when
the usage of AI increasing continuously, there are much challenges for the society. Hence, the
debate are still carry on until human find out solutions which can last a long period.
Lastly, the discussion of reality of control. The AI technology is not mutual for the
company to use as decision maker. Yet, the programmer who made it might have the chance
to control it. Moreover, the directors who hold the power to control the company would not
trust the AI to take off their power easily, and how to let the wise shareholder to believe the
AI will make a better decision than the board of directors.
In conclusion, the development of the AI is growing rapidly. It is not only a
imagination about the AI can control a company by it own or be involve in the company

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decision making. When that time has come, I believe there will have much legal argument
compare to nowadays. Therefore, I think the government from each countries must start the
discussion about the Legal issue about AI to decrease the provision risk.
(C) According to the journal of Robots in the Boardrooms: Artificial Intelligence and
Corporate Law by Florian Möslein, it analyse the relationships between artificial intelligence
and corporate law. Artificial intelligence (AI) will be used in organization boardroom in the
near future because of the rapid improvement of technology. Corporation has to consider
which human directors should are suitable to rely on AI? Besides, there is also a possibility
that AI not only to support human, but to replace human; therefore, whether the replacement
of human by AI is legally admissible? Moreover, the current legal strategies are adopted by
corporate law are in-charged by human directors. Whether the strategies are suitable for the
boardrooms that consist of robo-directors? It concludes that application of AI Ain
corporation is highly relevant with corporate law.
Usage of AI increased in order to support management decisions in various business
sectors especially in financial industry as it can summarize the complex data. Computational
progress and digitalization lead to corporate directors being supported or even replaced by
AI. Corporate law will face essential challenges due to the technological improvements. The
traditional corporate law rules require adjustments if the AI has promoted into boardrooms.
However, corporate law has not kept pace with the advancement of AI and computer
algorithms. These challenges are fundamental for corporate law.
The topics of where AI fits in the corporate law and which parts of the corporation
would be most affected if corporate bodies were to incorporate AI are needed to consider
about. Today, there are many tools and techniques are undertaken by AI. AI can manage
large amount of data which can improve decision-making and reduce uncertainties.
Therefore, AI involved in complex decision-making within company. Shareholders and other
stakeholders require to take decision on investment or divestment, and voting for general
meeting. The main decision center of the corporation is located within the board of directors.
Many types of decisions have to be made by directors; therefore, the decisions to be taken by
the board of directors quantitatively outweigh. In consequence, AI plays important role in
boardroom decisions; robo-directors are increasingly being discussed in modern business
practice, and not robo-shareholders or robo-stakeholders.
Besides, the role of AI as an assistant and whether it is reliable by human are the topic
that need to consider about. AI has three different forms, namely assisted, augmented and
autonomous AI. In the assisted AI stage, machines perform certain specific tasks, but human

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is the one who have right to make decision. In the second stage, augmented AI, humans and
machines share decision rights and learn from each other. In third and final stage,
autonomous AI, machines take full decision rights. The forms of AI are between support and
replacement of corporate directors by machines. Operation of AI system is still expensive, the
predictions from AI may not be suitable in every case for human. In current situation,
director’s duty to delegate the processing of information to AI devices therefore seems
difficult to establish.
In further future, human directors might not only be supported, but replaced by AI.
Philosophers state that if AI intelligence surpasses human, it might erase mankind.
Economists also suggest that although AI good at making predictions, but human need to
make judgements so that there is foreseeable future. Besides, creativity and innovation of
human are not be able to replace by AI as AI does not have this potential.
Lastly, if national corporate law allows AI to become a director, corporate law will face the
fundamental question of whether the legal strategies that it has created for human agency
relationships are still suitable for robots acting as agents. When AI legally act as directors, the
corporate law itself threaten to become dysfunctional, and its legal strategies are therefore
most provocatively called into question. There are two possibility of dysfunctionality, some
legal strategies are likely to miss the mark, while others are likely to become inessential. On
the other hand, the incentive strategy is doomed if AI are incentivized by different things to
human directors. Although it is hard to identify about the potential incentives for artificial
intelligence due currently technological development, these respective differences do not
seem unlikely. Since machines cannot become insolvent, for example, it is questionable as
whether they would try to avoid tasks or liabilities like human.
In conclusion, the rapid enhancement of AI will lead to exponential changes of
corporate world. According to the fundamental above, AI mostly promoted at board level,
where it can make complex corporate decisions. Besides, directors allowed to delegate tasks
to AI with certain restrictions. Directors can obtain assistance from AI if it has superior
information processing capabilities. Rapid advancement AI might replace human as director.
The corporate law will face fundamental question which the legal strategies whether proper
to AI.

Q2(A) Plot
The Founder is a movie talking about the true story of Ray Kroc in establishing
McDonald’s. It begins with Ray Kroc tries to sell his milkshakes mixers to the fast food

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restaurant but he fails. While promoting his products he will buy their fast food but their
service is slow and terrible. Ray Kroc likes to listen to radio every night which always
motivating him to be a determined person. Next, through the call of Ray Kroc between his
clerk, we know that Ray Kroc company- Prince Eastle is facing financial problem. However,
He receives a good news which is a large order of milkshakes mixers that has been placed by
McDonald’s. Ray Kroc is curious to know what shop is having the need of such a large
amount of mixers. Then, he goes to visit McDonald’s in Califonia. He then meet the brothers-
Mac and Dick. Mac gives him a tour of their shop. Their good system has surprised Ray. The
quality of food is high and service is fast. At night, Ray has dinner with Mac and Dick. They
tell him their origin story of McDonald’s. The brothers change their movie theater to sell the
fast food. They move their shop from Monrovia to California in 1940. They provide drive in
service like other fast food shops but the sale is not good. Then, they develop an effective
system to operate their shop. They change the menu from 27 types of food to food like french
fries and hamburgers which hold 87% of their sales. The next day, Ray suggests Mac and
Dick to do the franchise. However, they are worry about the quality control over other
franchisees’ shops as they have been tried to do the franchise but the result is undesirable.
On the other hand, Ray’s wife- Ethel does not support Ray to do the business of
McDonald’s as she hopes Ray to spend more time at home. However, Ray still insists on
doing the business. He then successfully convinces Mac and Dick and makes a contract with
them. When Ray asks the permission of the brothers to have a basement and stove in the new
shops, they have a row. The quality is out of control in the beginning as the franchisees his
found were not follow the operation system McDonald’s have. Ray gives up to cooperate
with his first group of franchisees. He then joins a lot of events to attract some people who
are determined to be his franchisees. Ray’s business is becoming larger.
Ray’s meet Rawland in Minneapolis. Rawland has been doing business in catering
industry around 20 years. Rawland joins Ray as a franchisee. Rawland’s wife- Joan finds a
milkshake powder with strawberry and vanilla flavour to make ice cream so the production
cost can be reduced. However, the brothers are not agreed with it. And now, Ray is facing
financial problem as he cannot earn much. The operating cost is high, he needs to pay his
company’s debts and the profits he get is less which is only 1.4%. Ray tries to negotiate with
the brothers and requires for 3.5% profit but he does not succeed. After that, Ray meet Harry
Sonneborn who teaches him in operation and suggests him to buy property and rent them to
franchisees. Hence, there will have two benefits which are greater capital and steadily
income. Ray can take control over Mac and Dick as well.

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 Ray decides to have a divorce with Ethel. He is willing to give her everything except for
his business. Then, Mac goes into a diabetes shock as he has a quarrel with Ray for the
problem of Ray’s company name- McDonald’s. Ray visits him in the hospital and he gives
them a blank cheque with a request of buying the brothers’ company. Harry as Ray’s lawyer
negotiates the deal with the brothers. Mac and Dick asks for 2.7million, 1% of the company’s
profit and to keep the shop in San Bernardino. The 1% corporate future profit is carried out
on a handshake basis. Finally, the brothers are forced to change their shop’s name because it
infringes on the intellectual property of Ray.
Favorite Character
My favorite character in The Founder is Ray Kroc. Ray Kroc is the main character of this
movie. He was an experienced salesperson that was selling many types of products like wax
cups, multimixers, and others before he met McDonald’s. Ray Kroc is a successful
businessman. He is a man with a huge careerism. He has faced failures in his life many times
but he never gave up. He loves his business and he is enthusiastic in everything he does.
First of all, the determinant of Ray Kroc is the main thing I can learn from Ray Kroc is
determinant. Ray Kroc is persist in doing business. When he as a salesperson, he promoted
his products- milkshake mixer to a lot of different shops. Although all the shops owners has
rejected him but he was persistent. He went through many cities to promote his products and
he kept saying the same sentences he has prepared to convince the customers. He never gives
up for the things he wants to achieve. When he was not able to earn enough profit from the
McDonald’s business, he tried to negotiate with the brothers- Mac and Dick. However, he
failed but he did not lose heart, he found and tried any possible way to solve the problems he
faced like using Instamix to save the production cost of ice cream in order to increase the
profit. Besides that, Ray is determinant in finding people to invest in his business. He joined a
lot of events to explore people when his business was just started up. Due to Ray’s
characteristics of determinant, he succeeds to establish his company- McDonald’s.
On the top of that, the courage of Ray Kroc is another characteristic I can learn and
practice in my daily live. Ray Kroc is not afraid to try everything that he wants to do. He
loves to do business, so he dares himself to give it a try no matter what risks he will face in
doing business. For example, he is daredevil to mortgage his house for the McDonald’s
business. When the bank threatened him to cancel his house mortgage, he was very brave to
complaint with the bankers. Through the movie, we know that we should be brave to make an
effort on our interested things.

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 Apart from that, the third thing I have learned from Ray Kroc is the enthusiasm spirit.
Ray Kroc is enthusiastic on the thing he does. Ray Kroc loves business so, he only works to
do business for himself. When his wife unsupported him to start the McDonald’s business,
the conflict between them was getting bigger and bigger. However, his enthusiasm to
business would never decrease. When he wanted to have divorce with his wife, he said that
he could give her anything but he did not want his wife to have any share of his company.
From this, we can know that his passion to his business is that much. Hence, the enthusiasm
spirit is the thing I can learn from Ray Kroc as this is also one of the important characteristics
which makes him to be successful.

(B) The best scene in “The Founder” was in the middle part of the movie. This scene
talks about how Ray Kroc started to franchise McDonald from a small town fast food
restaurant to a nationwide fast-food restaurant. After signing a contract with the founders of
the McDonald’s which are Dick and Mac, Ray opened the first Mc Donald branch in his
town. After that, Ray started to invite some of his friends who are the capitalists to open Mc
Donald in other places in the US. Unfortunately, his friends did not have the persistence to
operate the fast-food restaurant. Therefore, Ray began to find some enthusiastic middle-age
people to open the franchise everywhere they want and Ray provided capital for them and
gave them rights to manage their branches. Although there were quarrel between the brothers
and Ray, but he continued his objective to expand McDonald’s to everywhere in the US. The
reason that we likes this scene most is in this scene we can see the persistence of Ray to
expand his business, almost everything was done by himself like seeking of franchisee, asked
for bank loan even that he needed to mortgage his own house, drove his car over the states to
investigate the operation of each branch and so on.
The other best scene in this movie is the last part of the movie. This scene tells about
Ray and the brothers agreed to void the original contract and Ray agreed to pay an amount of
2.7 million US dollar to them as compensation. In the toilet, Mac asked Ray why do not just
steal the brothers’ concept and open his fast-food restaurant. Ray explained that the most
important thing for Mc Donald was not the speed system; was the name of the restaurant
“McDonald’s”. The name and logo of the restaurant which were the golden arch that gave a
strong impression to the citizens. Mac was enlightened by Ray and at the end of the movie,
the brothers are forced to change their restaurant name to The Big M as McDonald’s has
became an intellectual property of Ray’s company. The reason we like this scene is the words
that Ray told Mac at the end of the movie, we are impressed by the determination of Ray.

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This scene explains the ambition of Ray in the whole movie. Ray wanted to take over the Mc
Donald when he met the brothers so he started to bind contract with the brothers, used their
concept to expand his business and at the end, he paid them a compensation fees of 2.7
million only. We are amazed by the planning of Ray in the entire movie.
The third best scene we like the most is in the first half of the movie. After Dick
introduced his operating system to Ray, Ray invited the brothers for dinner. In this scene, the
brothers had shared their story about how they started their fast food business, reason they
introduced a new operating system in fast food industry, how they tried to expand and
maintain their business, how they attracted the public to visit their restaurant, how they
changed the opinion of the public about fast food restaurant. In the next day, Ray suggested
them to open franchise nationwide but the brothers refused it because they had tried it before
but fail to maintain the food standard so they decided to give up. We like this scene because
the story of the brothers encourages us that we should follow our dreams and our life
objective. We should not easily give up when there is any frustration to meet. Our group also
amazed by the generosity of the brothers who volunteer to share their story with others.
(C) “The Founder” has taught us many important lessons. Some of them are as follows:
be curious, think big and negotiate contracts carefully. The first lesson that I have learnt in
this movie is to be curious. Curiosity is an important identity to get an innovative idea. Ray
was not able to sell his milkshake, but he received an order of 6 machines were ordered by
McDonald’s. He could have simply delivered the order, and also avoided travelling a long
distance to find out the reason, however, he was curious and decided to visit the restaurant.
Hence, he met McDonald’s- the fast food restaurant which made him successful in his life.
The second important lesson is thinking big. It enables people to accept the new
challenges and creation of abilities to solve challenges. McDonald’s which is a productive
restaurant business model was innovated and mastered by McDonald brothers. Ray thought
big with his endurance; thus, he innovated and mastered the art of business development by
franchisee method.
Besides, the third lesson that I have learnt is to negotiate contracts carefully. A good
negotiated legal contract builds protection and considered as a competitive advantage. In this
movie, Ray initially agreed to a complicate contract which is stipulated that all business
decisions must go through the McDonald brothers. Later, instead of putting in writing the
deal of providing 1% of McDonald’s earnings to McDonald brothers., Ray preferred them a
handshake deal on this contract. This movie shows that McDonald brothers were legally
prohibited from using their last name on the signage of their restaurant. Therefore, the

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brothers were unable to prove the agreement of handshake and denied any royalties from the
McDonald’s corporation.
In conclusion, these important lessons which are be curious, think big and carefully
negotiate contracts are the way to success to expand the business with earn more revenue.
References

Bayern, S., Burri, T., & Mmslein, F. (2016). Company Law and Autonomous Systems: A
Blueprint for Lawyers, Entrepreneurs, and Regulators. SSRN Electronic Journal. doi:
10.2139/ssrn.2850514

Mmslein, F. (2017). Robots in the Boardroom: Artificial Intelligence and Corporate Law.
SSRN Electronic Journal. doi: 10.2139/ssrn.3037403

Solaiman, S. M. (2016). Legal personality of robots, corporations, idols and chimpanzees: a

quest for legitimacy. Artificial Intelligence and Law, 25(2), 155–179. doi:
10.1007/s10506-016-9192-3

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