Question

7. A. Ben Cohen and Jerry Greenfield originally made ice cream in the back of their own shop. Later they expanded their business into a stock exchange traded corporation and built a factory that produced 240,000 pints per day. What happened to their own ownership when they expanded and built the brand’s first mass production factory?  

B. Many years after their successful expansion, Ben Cohen and Jerry Greenfield were forced, against their will, to sell all of their ownership rights to the Ben and Jerry’s brand name along with its, by then, many factories.   This sale took place against their stated preferences. Explain how and why they were forced to sell the successful company that they had created.    

Answer 1

A) Earlier Ben Cohen and Jerry Greenfield were selling icecream in the back of their shop. Which signifies that they might had a partnership firm, wherein they both were the owner. However later they expanded and got listed in stock exchange, which means the company can issue shares . So when a company issues shares, all the shareholder become the owner of the company. They more the company allows others to hold their share the more Ben and Jerry's ownership will get diluted. Hence after getting listed on stock exchange they are no longer the sole owner of the company.

B) There can be many reasons for them to sell off their ownership , this can be due to wrongdoing by them which is legally unacceptable. It can also be the case that the company has taken huge debt and didnt pay back. It can be because of hostile acquisition by another company. In all such cases it is against the will of the owner of the company to sell the company but are forced to do that.