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 A. Ben Cohen and Jerry Greenfield originally made ice cream in the back of their own shop.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).

Ben Cohen and Jerry Greenfield were selling ice cream in the back of their own shop. Two names means that they might had a partnership, wherein as they are the owners. Later they expanded their business and got listed in stock exchange traded corporation, The concept of stock exchange means, the company can issue shares .

So when a company issues shares, all the shareholder become the owner of the company. For any company owners are increases there is a chance of ownership diluted. the company allows others to hold their share the more .Ben Cohen and Jerry Greenfield's ownership will get diluted. Hence after getting listed on stock exchange they are no longer the sole owners of the company.

B).

There can be a reason for them to sell off their ownership , this can be due to wrong doing by them which is legally acceptable. It can also be the case that the company has taken huge debt and didn’t pay back. It can be because of dislike acquisition by another company.

In all such cases it is against the will of the owner of the company to sell the company but they were forced to do that.