ArticlesPut and Call Options

The SA’s shares are freely transferable: during its operation, during its liquidation stage, during its submission to collective proceedings. The admissibility of the free transfer of SA shares results from the principle of the free transfer – about which our previous article ( art . 41 §1 and on this explanatory memorandum of law 4548/2018). We have pointed out, however, that this principle is not applied in two cases – as regards SAs with shares not listed on a regulated market. We have already dealt with the first of these (: restricted shares – art . 43) ˙ these are those which are subject to statutory restrictions regarding their transfer. Here we will be concerned with the second, but equally interesting, case: the put and call options.


Concept & Content

Έννοια & Περιεχόμενο

It is, by law, possible (art. 44 of Law 4548/2018) to conclude a shareholders’ agreement, among themselves or with third parties, which provides the option to buy (: call option ) or sale (: put option ) of nominal shares.

With such an agreement (:option), the right is granted to the beneficiary to draw up on their own (“unilateral”) declaration another main contract with their bound-under a relevant obligation counterparty. The cooperation, that is, in this case, of the obligee is not required; this, moreover, is what differentiates the option agreement from the commonly known preliminary contract.

The option constitutes, respectively, a property right and a transfer right, which works as follows: The shareholder or a third party in whose favor the relevant right is found, can, as a result, proceed , alone, to buy or sell shares. Also, to acquire or transfer them. An agreement that grants option must be in place. The agreement must specify the shares it bounds; it must also deduce its object: the right to buy or sell them as well as the individual conditions. In order for the beneficiary to enter into the final contract of purchase or sale of the shares for which they have the option, their unilateral declaration to their bound/under the relevant obligation counterparty is sufficient. The latter (the obligor) is not entitled to deny the occurrence of the legal consequences of the beneficiary’s unilateral declaration: they have already provided them with the relevant authority.

The option agreement may involve the payment of consideration by the beneficiary to the obligee/obligor. The possible agreement of such a consideration sufficiently explains the reason why the purchase price of the shares may be higher than their value (see 4648/2014 Court of Appeal of Athens , CJEU, 2/2015, pp. 145 – 151).

Forms of Options

The agreement of the option can also refer to the content of the forms of restrictions of the shares, which we have already dealt with (art. 43). Among them (and according to the explanatory memorandum of Law 4548/2018 on Article 44) the obligation (: drag along ) or right agreements (: tag along ) of the minority to sell together with the majority shareholders. The restricted shares presuppose, according to the aforementioned, a statutory provision; the option agreement does not (:43 §2 para. c΄ and d΄).

Activation Time of the Option

The option agreement may be subject to a suspensive condition or term. In this case the relevant right (:option) will not be activated in the first place. It will be activated either as soon as the term is fulfilled (that is, the agreed future and uncertain event has occurred) or as soon as the agreed deadline has passed (see 4648/2014 Court of Appeal of Athens).

Registration of the Option Agreement

Such an agreement (in the context of which an option is granted) can be recorded in the shareholders’ book or, in the case of intangible shares, in the register, with the care of the contracting parties ( art . 44 §1) . As the registration of the relevant agreement is potential for the parties, the completion or non-completion of the registration does not affect the validity of the agreement. Through it, however, its transparency and “publicity” is achieved. It is, therefore, necessary in the vast majority of cases.


The Exercise of the Option

The option, as already pointed out, is exercised by a unilateral declaration of the beneficiary to the one bound/obligor (and not to the SA).

With the declaration to the obligor regarding the exercise of the right (CC 176), the agreed main contract is drawn up. In this case, the rights and obligations arising from it kick in (if, for example, it is a sale, the rights and obligations of 513 et seq., 534 et seq. of the Civil Code are activated; the buyer becomes the bearer of the rights and obligations that derived from the shares).

No specific form is required for this declaration of the beneficiary. This is normal, as a written contract is not mandatory for the valid transfer of shares either. The exercise, therefore, of the option can be done in writing or orally, explicitly or implicitly (see 4648/2014 Court of Appeal of Athens). However, the written exercise of the right is advisable (if not necessary – for proof purposes only).

In the event that the SA’s Board of Directors (or the person who keeps the shareholders’ register) confirms that the option has been duly exercised (: fulfillment, among other things, of the agreed conditions and formalities – including the payment of any price) it must register “immediately” the change of the shareholder in the book or register (art. 44 §1) . In fact, for this specific registration, cooperation of the parties to the transfer is not required (by express exception of what is required by art . 41). Also: the registration is neither dated nor signed by the transferring shareholder, the acquirer or their proxies (art. 41 §2, section b) .

This registration legitimizes the beneficiary vis-à-vis the company. Its realization (or not), however, does not affect the validity of the transfer.


The Bending of the Principle of the Free Transfer of Shares

The principle of free transfer of shares still applies even when an option agreement has been drawn up. In order to prevent the possibility of such (unnecessary for the holder of the option) transfer, a relevant clause is required in the option agreement. Specifically, as the law expressly provides, in the option agreement “…a clause may be set that until the option is exercised or amortized, no transfer of the shares may take place” ( art . 44 §2, section a)

However, even the existence of such a clause does not, in the first place, invalidate the expropriation deed (: transfer) between the obligor and the third party, in terms of the option agreement. Any exercise, therefore, of the option cannot reverse said transaction.

On the contrary, the above clause applies to third parties only if it is specifically noted in the shareholders’ book or in the relevant register of intangible shares. It is in the latter case that the so-called ” implementation ” of the prohibition of transfer takes place. Therefore, in case of non-recording of the clause prohibiting transfer or non-specific mention of it in the book or in the register of shareholders, any transfer of the shares by the obligor to a third party is valid. The holder of the option may, however, claim damages against their counterparty. Possibly, they may also be entitled to seek recourse against the third party from the provisions on tort or deception of creditors ( art . 914 et sec., 919 and 939 et sec. of the Civil Code); provided, however, that the third party was aware of the option agreement.

However, in case of specific mention of the specific clause in the book of shareholders (or register), any transfer of the shares by the obligor to a third party becomes invalid. It is, as is accepted, a nullity which the beneficiary of the option can assert (:relative nullity).


The Amortization Of The Option

The cases of amortization of the option are also of particular importance (see 4648/2014 Court of Appeal of Athens).

The option (it is assumed) must be exercised within a reasonable time. However, given the vagueness of the relevant concept (“reasonable time”), it is necessary for the contracting parties to agree, expressly, on a deadline or dissociative clause (after the expiration or, respectively, the fulfillment of which), the relevant right is extinguished.

The option may also be extinguished by subsequent contrary agreement of the parties (361 Civil Code). Also: in case of subsequent (express or implied) resignation of the beneficiary.

In addition, its abusive exercise or the weakening of the relevant right may lead to amortization of the relevant right (art. 281 of the Civil Code). Also, in case of contradictory behavior of the debtor: when, e.g., the owner of the shares has encumbered the shares with a pledge, they are not entitled to claim from the obligor to acquire them.

Finally, any unforeseeable change in circumstances can lead to the depreciation of the option, which makes the consequences of the exercise of the right of option extremely burdensome (art. 388 of the Civil Code).


Restrictions on the transfer of unlisted SA shares may be set by its articles of association (so we are talking about restricted shares) or by agreement between the obligor and the beneficiary. In the latter case (: option to buy or sell shares) no formula is required. However, the risks posed by the “informality” of this agreement are extremely important. It is precisely this fact that mandates the publication of the relevant agreement in the book or register of shareholders. And even more: the written, detailed, but especially careful delimitation of the rights and obligations of the parties involved. Also: of the individual parameters of their agreement.-

Stavros Koumentakis
Managing Partner


P.S. A brief version of this article has been published in MAKEDONIA Newspaper (July 31st, 2022).


Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

Stavros Koumentakis
Nikis Avenue & 1, Morgenthau st., 54622 Thessaloniki
(+30) 2310 27 80 84

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