Article 32 of the Belgian Company Code prohibits agreements amongst shareholders or with the company that exclude a shareholder from participating in the company's profits or sharing in its losses. This prohibition was traditionally construed to disallow call options that would permit a departing shareholder to sell his or her shares to another shareholder (or other shareholders) at a price at least equal to his or her investment in the company.

However, in its decision of 5 November 1998, the Belgian Supreme Court limited the abovementioned prohibition to agreements that are intended to affect the balance of interests within the company by guaranteeing profits or avoiding losses. The Court seemed, in this respect, to follow a recent decision of the French Supreme Court (Commercial Division). Accordingly, agreements pursuant to which shareholders grant a departing shareholder a call option at a price exceeding that shareholder's original investment fall outside the scope of application of Article 32 of the Company Code. In other cases, it appeared difficult to apply this new case law.

The Brussels Court of Appeal has applied this precedent in two recent decisions. The Antwerp Court of Appeal, on the other hand, ruled otherwise in a decision of 28 June 2007. According to this decision, a call option does not violate the prohibition set forth in Article 32 of the Company Code since it only obliges a shareholder to pay a price to another shareholder and does not oblige the company to return the investment, which remains subject to corporate risk. It should be noted that this decision runs contrary to the majority interpretation of Article 32, which holds that it is prohibited to exempt a shareholder from participating in corporate risk. Therefore, the Antwerp Court of Appeal's decision is unlikely to be approved.

Recently, the Belgian Supreme Court took another step in permitting call options at a price exceeding the shareholder's investment in the company. In a decision of 29 May 2008, the Court held that an agreement to acquire a shareholding in a company, subject to the condition that the other shareholders undertake to buy the shares for a fixed price, even if this price exceeds the shareholder's investment, within an agreed period of time or when a certain condition is met is not contrary to the prohibition set forth in Article 32 of the Company Cod, provided the agreement is in the company's interest. In the case at bar, a public entity of the Flemish Region agreed to provide financing to a company for a limited period of time. It followed from the circumstances that the investment entity did not intend to be a shareholder indefinitely, only to lend funds for a limited period. This was confirmed by the fact that the investment entity did not participate in the company's management and acted solely as a lender. Therefore, the call option entitling the investment entity to sell its shares to the other shareholders after an agreed period of time was found to be permissible.

Again, the Belgian Supreme Court seems to have followed recent case law of the French Supreme Court.

It is unclear from the decision of 29 May 2008 whether this decision should be considered an application of the theory developed by the Supreme Court in its decision of 5 November 1998, i.e., that an investment by a public entity does not affect the balance of corporate interests in the company since it is in essence a form of financing and not a means of participating in the management of the company in order to make a profit.

Furthermore, it is also unclear whether the theory developed in the decision of 29 May 2008 can be applied to other cases when the investment is not temporary or when the investor intends to finance the company without intervening in its management.

All this case law is commented in the last 2008 edition of Tijdschrift voor Rechtspersoon en Vennootschap.