The right of an employee to acquire shares in a limited liability company

Abstract

In order to achieve good business results, a company has a number of incentive measures at its disposal to motivate employees to be more productive and efficient in performing their activities. In comparative practice, one of the most successful corporate management measures is the plan for allocating shares to company employees. By introducing amendments to the Business Companies Act, this plan has become an integral part of the legislation of the Republic of Serbia. This innovation in corporate management applies exclusively to limited liability companies. For the purpose of implementing this incentive measure, two new terms were defined: the reserved own share (ROS) and the right to acquire shares as a financial instrument. In this paper, the author analyzes the Employee Stock Ownership Plan (ESOP), examines the diverse applications of the ESOP in comparative law, considers the reasons for its adoption and the adoption procedure itself, and outlines the benefits of its implementation in the national law.

Keywords

• limited liability companies (llc)
• employees
• company owners
• esop
• reserved own share (ros)
• financial instrument - right to acquire shares