The Office Manager Who Could Sign for a $3-Million Company

The situation

Wei, a licensed plumber, and Tomasz, a paramedic, incorporated a company together five years ago to buy into a home services franchise operating out of St. Catharines. Wei ran the technical side, hiring and training crews as the business grew from a single truck to eleven employees across plumbing and HVAC service calls. Tomasz kept his paramedic job for the first two years while the company found its footing, then came on full-time to handle scheduling, fleet, and customer accounts. Neither of them enjoyed bookkeeping, so within the first six months they hired Feng as office manager to handle invoicing, payroll, and the company's day-to-day banking.

The business had grown steadily. By this year it was billing roughly $3 million annually, with two service vans becoming a fleet of seven and a small warehouse added for parts and equipment storage. Feng had become, in practice, the person who kept the company running between jobs — paying suppliers, managing the account that funded payroll, and increasingly signing off on smaller purchase and service agreements so Wei and Tomasz did not have to stop mid-job to review paperwork.

What the review found

The trouble surfaced when a commercial equipment leasing company called Tomasz to confirm delivery details on a five-year lease for two new service vehicles and diagnostic equipment, worth roughly $95,000 in total payments over the term. Tomasz had never seen the agreement. Neither had Wei. Both signatures on the lease belonged to Feng, who had signed as "authorized signing officer" of the corporation.

When Wei and Tomasz asked Feng about it, the explanation was straightforward and, in its own way, worse: a sales representative had approached Feng directly, the equipment looked useful, and Feng had signed the paperwork the way she signed dozens of supplier invoices and smaller service contracts every month — because nobody had ever told her not to.

The company brought its minute book and banking records to Treadstone Law for a review, worried about what else Feng might be able to sign without either owner knowing. What the review turned up explained exactly how this had happened. When the corporation opened its bank account five years earlier, the original banking resolution — the document a corporation's directors pass authorizing specific people to operate its bank accounts — named Feng as an authorized signer with no dollar limit and no requirement that anyone else co-sign. At the time, Feng was hired within the account's first few weeks, and the resolution had simply never been updated as the business, and Feng's day-to-day responsibilities, grew far beyond what either owner had originally pictured.

Under the Ontario Business Corporations Act, a corporation acts through its directors and the officers and agents they authorize — it cannot sign anything itself. Third parties dealing with a company in good faith are generally entitled to rely on what the company's own records show about who can sign for it, under a long-standing principle often called the indoor management rule. In practical terms, that meant the leasing company was entitled to assume Feng could bind the corporation, because the corporation's own bank documentation said so, even though Wei and Tomasz had never turned their minds to the specific lease. The company's actual, internal understanding of Feng's role — bookkeeping, not equipment procurement — was not something the leasing company had any way to know, and largely was not the leasing company's problem to sort out. The risk of an outdated authorization sat entirely with the corporation.

The review also found that the company had never adopted a shareholder agreement setting out how major decisions, including new financial commitments, had to be approved between Wei and Tomasz as the two directors and shareholders. Authority for everything from hiring to five-figure leases rested on habit and trust rather than anything written down.

What we did

1. Confirmed the corporation was likely bound by the existing lease. Given the outdated but valid banking resolution on file with the leasing company, we advised Wei and Tomasz that fighting the lease's validity outright was a weak position and would likely fail if the leasing company pushed back, since Feng had genuine apparent authority in the leasing company's eyes. The stronger path was negotiation, not denial.
2. Opened a direct conversation with the leasing company. Rather than disputing the lease's enforceability, we approached the leasing company to explain the internal mix-up and asked whether the equipment could be scaled back to what the company actually needed — one service vehicle and the diagnostic equipment, rather than two vehicles. Leasing companies generally prefer a smaller, performing agreement with a cooperative client over the cost and delay of pursuing a dispute, and this one was willing to talk.
3. Renegotiated the lease terms. The agreement was amended to remove the second vehicle and reduce the total lease payments to roughly $58,000 over the term, reflecting only the equipment the company genuinely intended to acquire. The company formally ratified the amended agreement through a signed director resolution, closing off any later argument that it was unauthorized.
4. Passed a new banking resolution. We drafted a replacement resolution for the corporation's bank, revoking Feng's unlimited signing authority and replacing it with defined limits: Feng could continue to sign routine payments and invoices up to a set threshold, while anything above that threshold, including new leases, loans, or contracts committing the company beyond day-to-day operations, required the signature of both Wei and Tomasz as directors.
5. Updated the corporation's minute book. The company's corporate records had not been properly maintained since the initial incorporation. We brought the minute book current, recording the directors' resolutions on signing authority and the lease ratification, and confirmed the corporation's officer appointments matched who was actually doing each job.
6. Drafted a short shareholder agreement. Because Wei and Tomasz were equal shareholders with equal say, we prepared a shareholder agreement addressing how future major decisions — new debt, new leases above a set amount, hiring senior staff, or bringing in a third owner — would require both of their agreement in writing, rather than relying on one director assuming the other was on board.
7. Recommended an annual governance check-in. Businesses that grow quickly tend to outgrow their original paperwork long before anyone notices. We suggested the company revisit its signing authority and minute book once a year, particularly after any change in staff roles or major purchase of equipment or vehicles.

The outcome

The renegotiated lease closed within a few weeks of the first call to the leasing company, at roughly $37,000 less in total payments than the original agreement Feng had signed. Feng kept her job, with clearer boundaries around what she could approve on her own and what needed a director's signature — a relief to her as much as to the owners, since she had never wanted the responsibility of committing the company to five-figure agreements in the first place. No supplier, lender, or landlord retained the old, unlimited banking resolution, because the new one had been delivered to the bank and to every party the company regularly dealt with.

Wei and Tomasz described the experience afterward as the moment they realized the company had grown past the informal habits that got it started. The plumbing side of the business had licensing, inspections, and permits to keep the technical work honest; the corporate side had been running for five years on a single piece of paper signed before the company had a warehouse, a fleet, or eleven employees. Fixing it did not cost the company the lease it needed, and it closed off a gap that could have let a much larger, much less easily renegotiated commitment slip through the same way.

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