Separating Ownership From Management in a Family Trucking Company

The situation

Camila and Valentina started their trucking company eight years ago with one truck and a shared bank loan. Camila kept her long-haul driving job and drove for the company on weekends and slow stretches at her regular employer; Valentina worked full time as a transit operator and handled the company's books, dispatch calls, and invoicing in the evenings. Between them, they incorporated the business, split the shares fifty-fifty, and grew it slowly to three trucks and annual revenue of roughly $650,000.

By the fourth year, neither sister had time to run daily operations on top of their day jobs. They brought in their nephew, Ari, first as a part-time dispatcher and then, within a year, as a full-time operations manager handling scheduling, client relationships, fuel accounts, and hiring drivers. Ari was good at the job. Revenue grew. Camila and Valentina were relieved to step back from the daily grind while still owning the company they had built.

The arrangement worked on trust for three years. Ari made most operational calls himself, signed off on fuel and maintenance contracts, and increasingly represented the company to clients and suppliers as though he ran it — because, in practice, he did. Nobody had written any of it down.

The governance gap

The company came to Treadstone Law because the sisters' bank flagged a problem while processing a new equipment loan: the bank's file listed Camila and Valentina as the only directors and officers with signing authority, but several recent contracts and purchase orders in the company's records had been signed by Ari, who held no formal position and no shares. The bank wanted to know who actually had authority to bind the company before it would advance the loan.

That question turned out to be harder to answer than anyone expected. Under Ontario's Business Corporations Act, a corporation is legally run by its board of directors — in this case, Camila and Valentina — unless the shareholders have formally agreed to change that. Verbally handing day-to-day control to a manager, however capable, does not shift legal authority. It only creates a gap between who the law says is in charge and who is actually making decisions. That gap is where problems surface: a supplier could later argue a contract Ari signed was never properly authorized, or Ari could argue that years of running the company gave him an unwritten claim to a stake in it.

The second problem was more personal than legal, but no less real. Ari had started asking, informally, whether he should eventually get equity for building the operation up. Camila and Valentina wanted to reward him fairly and give him a real career with the company — but they had built the business themselves and did not want to give up ownership to do it. Without a clear structure, that conversation was heading toward resentment on one side or an uncomfortable ownership dispute on the other, either of which could have fractured both the business and the family.

There was also no shareholder agreement between Camila and Valentina themselves. In eight years of equal ownership, they had never documented what would happen if one of them wanted to sell her shares, if the two disagreed on a major decision, or if one of them died or became unable to work. Two equal owners with no tie-breaking mechanism is a common and avoidable setup for deadlock.

What we did

1. Reviewed the corporate records first. Before drafting anything, we confirmed the actual share structure, the corporation's articles, and its minute book. This is where a governance problem like this one always has to start — you cannot fix authority you have not first mapped.
2. Drafted a unanimous shareholder declaration. This is a tool available under the Business Corporations Act that lets all shareholders of a corporation — here, Camila and Valentina, who together held every share — formally restrict the directors' powers and redirect specific management authority elsewhere. We used it to grant Ari clearly defined authority over day-to-day operations, including hiring drivers, managing dispatch, and signing contracts up to a set dollar limit, while keeping decisions above that threshold, along with anything involving new debt, new shareholders, or selling the company, with Camila and Valentina.
3. Put Ari on a written employment agreement as general manager. The agreement set out his title, salary, and a performance bonus tied to revenue growth and on-time delivery targets — giving him a real financial stake in the company's success without giving him equity. This addressed the compensation conversation directly instead of leaving it to drift into an ownership dispute.
4. Built a shareholder agreement between the two sisters. This covered what the company had never addressed: how major decisions would be made if the two disagreed, what would happen if one sister wanted to sell her shares (giving the other a right of first refusal), and how the shares would be valued and bought out if one sister died, became disabled, or simply wanted to exit the business.
5. Updated the company's banking resolution and signing authority. With the declaration in place, we prepared a fresh banking resolution naming Ari's specific, limited signing authority for operational accounts, so the company's bank had a document that actually matched how the business ran — resolving the exact question that had triggered the equipment loan review.

The outcome

The bank approved the equipment loan once the updated banking resolution was in place, and the company's records finally matched its reality. Ari had a written role, a defined budget he could act on without needing sign-off for every decision, and a bonus structure that rewarded him for the growth he was already driving. Camila and Valentina kept full ownership of the company they had built, with a clear governance structure between them for the first time in eight years.

The conversation about Ari's future stayed a career conversation rather than becoming an ownership dispute, because the compensation question had been answered directly and in writing before it had a chance to fester. A year later, the company added a fourth truck and Ari's bonus reflected the growth — exactly the outcome the sisters had hoped for when they first brought him on.

None of this required a dispute or a falling-out to fix. It required treating a business that had grown past its original two-person, handshake-run scale as what it had become: a company with a manager, a bank relationship, and shareholders who needed rules for how they would work together going forward.

It also gave Camila and Valentina something they had not had before: a clear answer to what happens to the company if one of them steps back. Camila still keeps her long-haul routes, and Valentina still works her shifts as a transit operator, but neither now has to worry about what happens to the business, or to Ari's role in it, if illness, a new job, or simply changing priorities takes one of them out of the picture. The shareholder agreement's buyout terms mean that question already has an answer, agreed while both sisters were on the same page and had every reason to be reasonable with each other.

What you can learn from this