China Has Implemented A Stock Option System A Number Of Legal Issues

The Stock Options System initially is a financial derivation tool. Later it is adopted in the management area as a system for long-term promotion. The Stock Options System is a cheap promotion method, and its special function of benefit combination does limit the managers' short-ranged and nearsighted actions, which helps the formation of managers' self-supervision and self-control system. The Stock Options System contributes to solving the problems of "inter-control" and "fifty-nine-year-old phenomenon", and promoting the development of our country's professional managers market. It has great advantages.The Stock Options System has been used widely and internationally. However, its implementation in our country meets great obstacles. The terms of Company Law and Securities Law hinders the implementation of the Stock Options System. In addition, Tax Law and Accountant Law lack specific formulations about the Stock Options System, which leads to the mess. The Stock Options System firstly belongs to the area of law. Due to the great function of the Stock Options System and the importance of perfecting the formulations about the Stock Options System, the article focuses on the aspects relevant to the implementation of the Stock Options System.The article introduces the definition and historic background of the Stock Options System, and analyses its theoretical bases on economy and jurisprudence. Then the article analyses the legal characteristics of the Stock Options System, definiting the Stock Options as profitable, free, restrictive and nonnegotiable rights. The article also explains the differences between the Stock Options System and other similar systems. Furthermore, the article compares the positive features with the negative ones, and illuminates the significance of the implementation of the Stock Options System.The article focuses on the study on the legal obstacles and defect in the aspectof the sources of stock, the vesting of options, the exercises of options, the favour of taxes, and accounting disposal. Through introducing the relevant formulations and the obstacles and defect of our laws, the article gives some advises to perfect our laws in the area of the Stock Options. The purpose is to explore the effective methods of perfecting our legal environments for the implementation of the Stock Options System.