A Study On The Right Of Appointment Of New Law In Japan

Japanese Company law provides for a special system–“New share reservation right” system,which although exist only ten years officially. However the system has been actually exist in the"convertible bonds","IPO subscription rights,""the subscription rights attached to shares ofcorporate bonds" and other forms of financial products before the concept of " New sharereservation right " formally established,which is in the Japanese commercial law reform in2001. In1938, Japanese Commercial law set up the convertible corporate bonds system, whichalready has a dual nature-options and claims rights. And it is clear that option system has along history in Japan. In the2001," New share reservation right " system is introduced inJapanese Commercial law modifications, which is the integration of "shares subscription rightsin the form of stock options" and "the subscription rights attached to shares of corporatebonds".New share reservation right can be issued separately, and as bonds with new share reservationrights which is combined with corporate bonds, and it also can be used as call condition of“stock subject to call”. New share reservation right originated from the stock option system inthe United States, but after decades of development and evolution, it has been greatly beyondthe scope of the use of stock options. New share reservation right is used not just as taxavoidance mechanism or employee incentive mechanism, but it has been extended to financing,corporate restructuring, mergers and acquisitions, and other fields. Its financing role and itsimpact to mergers and acquisitions is more and more important. At the same time, the holderof New share reservation right is not confined to the stock company’s shareholders, directors orsenior manager, but extends to all the people who has signed a stock subscription agreementwith the stock company.New share reservation right produced in Japan, the establishment and development, improvethe process is a long process of development. Although China didn’t set up a law system such asNew share reservation right system, as the development of economic and trade exchangesbetween China and Japan, many Chinese enterprises have to know and use this system. Of course, New share reservation right system is imperfect as laws and regulations, this paper willintroduce some imperfect points.This paper aims to introduce the Japanese development of New share reservation right systemevolution, operation and running, so that China as the neighboring countries of Japan have theright to know and use it in economic and trade exchanges. Meanwhile, many problems ofdomestic companies, such as lack of long-term employee incentive mechanism, financingdifficult of small and medium-sized enterprises, and foreign acquisitions risk, and it will besolved by the New share reservation right system in company law of Japan.