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Provision of the right to purchase shares (stock option plan) of an LLC (SIA)

The right to acquire a stock option plan may be granted immediately or after the accomplishment of certain conditions related to the goals achieved or the employment period in the company. The Commercial law does not provide for exactly how and when the company can grant an employee the right to acquire a share of the company (stock option plan), therefore, the company can grant the right to purchase its shares immediately or after a certain period of employment with the company. For instance, key employees will be granted the right to acquire the shares after a year of work with the company. The Board shall ensure that such rights and their owners are accounted for, and the number of shares purchased, and the terms of their acquisition specified. 

Only the company can buy back the employee's stock option plan unless the company has authorized the sale of the right to acquire the shares to another person. The Commercial Law does not describe the procedure for the alienation of the right to acquire the company shares. However, in analogy with the right to acquire the shares, provided for by the company, the right to purchase shall not be transferred, unless otherwise specified in the statute or in the terms of the issue of the stock option plan. Consequently, in can be stated in the statute that only the company can buy back the right to acquire the shares, unless the company has authorized another person to sell it. 

Apropos the shares, acquired as the result of the stock option plan exercise, they are alienated in accordance with Articles 188 and 189 of the Commercial Law. In accordance with part one of Article 188 of the Law, any member is entitled to dispose of his/her shares freely, unless otherwise provided by the Law or the statute. In accordance with part one, Article 189 of the Commercial Law, in the event when the shares of one of the participants are sold, the other participants have a pre-emptive right, unless otherwise provided by the statute. Consequently, it may be stated in the statute, that the shares acquired due to the exercised right to acquire the shares can only be bought back by the company. 

For more detailed information, please book a consultation via email: mail@l2bmanagement.com or phone: +371 67373020, 371 67373021.

 

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