A Research Into The Design Of Legal Institutions About Stock Option

The theory firstly indicates that stock option stemmed from stimulation institutions, and has the vivid characteristics including gratuitous gain and beneficial, selective, but restrictive exercise make it different from other stimulation institutions. The nature of stock option that is considered an object of this kind right has been an important subject on law research into stock option. There are mainly two different views on the nature of stock option that it is regarded as an" unilateral right "or "expected right". This theory shows that the nature of stock option shouldn't be simply summered up to a definite right, but should be made a final conclusion according to the specific situation as the following: from the date of reward to the date of given exercise, it is an accomplished right; from the date of given exercise to the date of sending the letter of exercise, it is an unilateral right; from the date of approval of exercise to the date of true exercise, it is a requested right.The financial scandals hi Europe and America just set up an essential alarm bell for all of countries who are practicing or are to practice stock option, which is whether stock option can still make its functions well on the present time or whether it is necessary and valuable to practice stock option in China. Therefore, the first task is just supposed to affirm its practical value before how to design scientific law institutions about the Chinese stock option. The theory gives a certain answer to practical value of stock option by making a scientific and comparative analysis on the cardinal reasons why the financial scandals occurred in Europe and America and by listing many successful companies around the world that are practicing stock option. On the above basis, the writer is sure that stock option still can bring into such stimulation effects as a lower agent cost, a stronger appeal to t employments for managers, a more permanent attitude at corporation's management and a more perfect corporation's management structure due to alleviate the problem about "control by insiders".However, there appear many relevant law obstacles to designing the Chinese stock option law institutions. Except for Lenovo and Fangzheng Corporation and so on that have just appeared on the stock market in Hong Kong, the Chinese stock option (it actually isn't worthy of its name, but only anexpected stock) that has put into practice for several years in haste lacks it adequate theoretical demonstrations and legal foundations, with the result that it similar to the expected stock has been sinking into such problems as lack of law foundations, violation of the present laws and practical operations in a state of confusion. It is undutiful that the most essential reason is that the Chinese legislation committee hasn't made an active reaction into practices on the Chinese stock option, Therefore, from the law point of view, how to design the Chinese stock option institution will still be a theory subject with some important epoch meanings that is supposed to be further researched by Chinese scholars. Not only is there a special law about stock option, but the present such economical law institutions as corporation law, stock law, tax revenue law, accountancy law and labor law can't become a law basis and even become some terrible obstacles to the Chinese stock option. So the only way to giving an exact nature and a perfect operating guide is just to design the law institutions about the Chinese stock option.The Chinese legislation committee is bound to keep the same pace with the practice of the Chinese stock option and then designs the law institutions about the Chinese stock option by a special legislation that should adopt a form of administrative law. At the same time, it is vital to consummate the present law institutions related to stock option including the stock supervision institutions and corporation's management structure institutions. On the basis of such a consideration, this theory plays an emphasis on how to design the specific law in...