According to legal theory, stocks of Joint Stock Corporation can be transferred freely. But that principle is not absolute. The disposition right of stocks may be restricted by law or articles of incorporation. Since 2000, stock options have been showing many disadvantages. Some corporations begin to take the restricted stocks as a substitute for stock options. The institutional design and the rights structure of restricted stocks are different from them of common stocks, which will become a double sword in corporate governance. However, stocks transferring right restricting system in Chinese corporation stay only on legal surface, so to broad free room for stockholders’ right allocation should become an important domain in next reform of corporation law.