KOMA classes and \LoadClass
The option paper
is actually not a class option, but an option of the typearea
package which is implicitly used by all KOMA-Script classes. Hence, what you need is the following:
\ProvidesClass{myclass}[2011/08/31]
\PassOptionsToPackage{paper=a5}{typearea}
\LoadClass{scrartcl}
The paper
option isn't automatically passed to the typearea
package by the KOMA-Script classes. On the other hand, this is the case for the old-style a4paper
, a5paper
etc. options. Thus, an alternative solution to your problem is:
\ProvidesClass{myclass}[2011/08/31]
\LoadClass[a5paper]{scrartcl}
I don't recommend the latter solution, though, since old-style options are more and more deprecated by the KOMA-Script classes.