The Study On The Legal System For Stock Option

Stock option is a system approach with which the company carrys out long-term incentive on its operators with the company's stock as the object in order to enable the company to have a better and long-term development and achieve maximum benefits. It makes the interests of the business operators and owners unified, organically combines the maximization of the operators'revenue with the company's benefits by means of giving the option shares to the business operators, and plays a strong function of interest bundle.In the stock option legal system in China, the system of laws and regulations is imperfect, and lacks systematicness and practical operation, so there exists a series of legal barriers in the process of operation. For example, in the Company Law, Securities Law, without stock option enacted by the legislative branch, normative documents put in force by the state ministries bring some difficulties to the implementation of stock option in the aspects of authority, legal validity and sphere of application. Therefore, it is of great significance to study stock option in theory and practice in order to establish related stock option laws, improve cooperate governance and build a standard capital market system.This paper, from the legal perspective, mainly makes a preliminary and systematic study of the issues in implementing the stock source system, granting system and exercising right system of the stock option plan, in order to find a feasible pathway for the healthy development of the stock option system. In stock source, a compromise capital system should be introduced while the relevant provisions of reserve stocks are improved. In granting, proposals will include that the independent director is put into the granting objects of stocks, making appropriate relaxation to the granting amount. In exercising right, it is suggested to properly prolong the waiting period, allow the exercising right of non-cash, stock exchange, etc. It is proposed that the Company Law and Securities Act regulate the circulation of the exercising right stock, properly relax the restrict of stock circulation, value the construction of the Commission and strengthen information disclosure system. Finally, this paper puts forward constructive suggestions for improving China's tax, accounting, and inheritance systems in accordance with the relevant system of stock option.