Some users have discovered they can't send sharing invitations when they right click on the calendar or contacts folder in their mailbox and choose Share, Share [folder].
When they try to send the email, they receive an error:
"Folder sharing is not available with the following entries because of permission settings on your network."
Cause and Solution
This happens when the user picks the recipient's name from the autocomplete list. The entry in the autocomplete list contains the SMTP address, not the Exchange x.500 information from the Active Directory, so Outlook thinks it's an outside address and denies it.
Delete the recipient's name when it comes up in the autocomplete list and select it from the Global Address List (GAL) instead.