Start of the Financial Year in Australia: Legal Checklist

The start of the financial year in Australia (1 July) is more than a date on the calendar - it’s a reset button for your business strategy, compliance and contracts.

If you use this period well, you can streamline operations, reduce legal risk and set clear goals for the year ahead.

In this guide, we’ll walk through a practical, legally-focused checklist you can action at the start of financial year (SOFY) to keep your business compliant and ready for growth.

What Is The Start Of Financial Year In Australia - And Why Does It Matter?

SOFY is when new budgets kick in, awards and wage changes often take effect, and plenty of compliance obligations fall due.

It’s also a natural time to review your structure, update agreements and put better systems in place.

Think of it as your annual “business health check” - an opportunity to fix gaps before they become problems.

Start Of Financial Year Legal & Compliance Checklist

Use this SOFY checklist to cover the key legal areas most small businesses encounter. You don’t need to do everything in-house - pick the items that apply and schedule the rest with your advisors.

1) Company, ASIC And Governance

• Confirm company details are up to date with ASIC (directors, addresses, shareholdings). If details have changed during the year, ensure the relevant forms have been lodged so your public record is accurate.
• Record and file your annual directors’ solvency resolution and diarise any ASIC fee or reporting dates for the year. A documented process around your solvency resolution helps demonstrate good governance.
• Review your internal governance documents. If the business has evolved, your Company Constitution may need an update to reflect current decision-making and share rights.
• If you have multiple founders or investors, check that your Shareholders Agreement still fits your cap table, roles, vesting and exit plans for the new year.

2) Employment And Workplace Settings

• Factor in any award updates, wage increases and allowances that take effect from 1 July. Ensure your payroll system is aligned before the first pay cycle of the new year.
• Update employment documentation. If you’re hiring or changing roles, make sure each team member has a current Employment Contract that reflects duties, pay, IP ownership, confidentiality and post-employment restraints where appropriate.
• Refresh workplace policies (leave, performance, WHS, bullying/harassment, remote work and device use). Policies anchor your culture and reduce disputes - especially as your team grows.
• Plan your staffing strategy. If you’re introducing bonuses, incentives or equity, document it clearly. For equity, consider an Employee Share Option Plan to align team and business goals during the year ahead.

3) Contracts, Sales And Credit Terms

• Review all customer-facing agreements. If you sell services, your Master Services Agreement or client T&Cs should address scope, inclusions, payment terms, variations, IP, liability and termination. If you sell goods (online or offline), ensure your refund and warranty clauses comply with the Australian Consumer Law (ACL).
• Tighten up your payment protections. Strong Terms of Trade help you manage deposits, due dates, late fees and suspension rights so cash flow is protected without chasing.
• Check supplier and contractor agreements. Update pricing mechanisms, service levels, delivery timeframes, insurance requirements and dispute resolution so they reflect how you operate now.
• If you trade online, ensure your Website Terms & Conditions are current and consistent with your customer journey (ordering, subscriptions, auto-renewals and cancellations).

4) Privacy, Data And Digital Compliance

• Map the data you collect. If you collect personal information (most businesses do), you’ll need a clear and accurate Privacy Policy that matches your actual practices (how you collect, use, store and disclose data).
• Strengthen your incident preparedness. A data breach response plan helps you act quickly and lawfully if something goes wrong, minimising harm and downtime.
• Check cookies and tracking disclosures on your website and ensure your consent banner and policy wording are aligned with current practice.

5) Consumer Law And Marketing

• Refresh your advertising and claims. Misleading or deceptive conduct is prohibited under the ACL. Ensure pricing displays, discounts, testimonials and RRP claims are accurate and can be substantiated.
• Make sure your warranties, returns and cancellation terms reflect your actual process and the ACL’s consumer guarantees. If you provide a written warranty, consider a compliant Warranties Against Defects statement.
• If your team handles sales scripts or promotions, a quick training refresher prevents accidental non-compliance. For a deeper primer on fair and accurate advertising, see our overview of Section 18 of the ACL.

6) IP, Brand And Commercial Strategy

• Audit your brand assets. If you’ve launched new product lines or sub-brands, consider lodgement of trade marks for names and logos to lock in protection as you scale.
• Capture ownership. Ensure your employment and contractor agreements include robust IP assignment clauses so all work created for your business is owned by your business.
• Review licensing and collaborations. If you rely on influencers, resellers or partnerships, check your agreement templates and brand guidelines are up to date.

7) Risk, Insurance And Dispute Readiness

• Confirm insurance coverage and limits match your contracts and risk profile (public liability, professional indemnity, cyber, product liability).
• Include practical dispute pathways in your agreements. Clear notice, escalation and mediation steps help you resolve issues early and cost-effectively.
• Keep your registers and document repository tidy - version control, e-signature processes and renewals calendar make compliance easier year-round.

Should You Change Your Business Structure At The Start Of Financial Year?

SOFY is a good time to check whether your current structure still fits.

Many owners begin as sole traders for simplicity, then move to a company as revenue grows and risk increases.

Here’s a quick recap of common structures and why you might change.

Sole Trader

Fast to set up and easy to run, but you’re personally liable for business debts.

If you’re taking on larger contracts or hiring staff, the risk profile can make this less attractive over time.

Partnership

Simple for multiple owners, but partners are generally jointly responsible for debts and each other’s actions.

If you’re expanding or seeking investment, a more formal structure may be better.

Company

A separate legal entity that can provide limited liability, easier equity arrangements and a clearer governance framework for growth.

If you move to a company, review your Company Constitution and put a Shareholders Agreement in place so decision-making, roles, and exits are clear from day one.

There isn’t a one-size-fits-all answer here - the right structure depends on liability, tax, funding and your growth plans. If you are considering a change, plan the timing (including contract assignments and notifying customers/suppliers) so it aligns with your SOFY rollout and minimises disruption.

Refresh Your Contracts And Policies For The Year Ahead

Contracts are living documents. As your pricing, services and team evolve, your paperwork should follow.

At SOFY, review your core documents and lock in updates before new projects kick off.

Customer And Supplier Contracts

• Scope & deliverables: Confirm how change requests are handled and what’s out of scope to avoid “scope creep”.
• Payment & late fees: Align payment terms with your cash flow goals. Clear late fee provisions can deter overdue accounts.
• Liability & indemnities: Ensure risk is allocated fairly and your insurance aligns with your contractual obligations.
• Termination & renewals: For subscriptions and retainers, clarify renewal windows and notice requirements so there are no surprises.

Workplace Policies

• Leave and entitlements: Reflect current entitlements and any enterprise/award obligations you rely on.
• Performance and conduct: Keep performance management pathways transparent and consistent for managers.
• Technology and privacy: Address device use, data handling and remote work expectations.

Online And Marketing Documentation

• Website Terms & Conditions: Set the rules for site use, user content and IP ownership.
• Privacy Policy: Match what you actually do with data (collection points, analytics, cookies, email marketing).
• Sales terms: Ensure your Terms of Trade reflect delivery timeframes, risk transfer, returns and ACL compliance.

Tip: Don’t wait for a dispute to “test” your documents. A proactive SOFY update costs less than resolving the same gaps after something goes wrong.

Plan For Growth: Hiring, Incentives And Partnerships

SOFY is a natural moment to map your growth projects and align your legal foundations.

Hiring And Team Changes

As roles shift, refresh position descriptions and issue updated Employment Contracts so responsibilities, confidentiality and IP clauses are crystal clear.

If you’re experimenting with commission or bonus structures, put them in writing to avoid misunderstandings later.

Equity And Incentives

Equity can be a powerful retention tool. If you’re offering options, ensure your plan rules, offer letters and vesting schedules are consistent and compliant - an Employee Share Option Plan provides a structured framework that’s easier to manage as you grow.

Partnerships, Resellers And Collaborations

Partnerships can accelerate reach, but they also introduce brand and liability risk.

Use well-drafted reseller, referral or collaboration agreements that set expectations on pricing, marketing approvals, IP use, confidentiality and termination.

Common Start Of Financial Year Pitfalls (And How To Avoid Them)

• Rolling over old contracts: Out-of-date T&Cs are a major source of scope, payment and IP disputes. Schedule an annual review and reissue your updated documents at SOFY.
• Ignoring privacy updates: Businesses evolve fast - websites, CRMs and marketing stacks change. If your Privacy Policy doesn’t reflect current data flows, you’re exposed.
• Assuming ACL compliance: Good intentions aren’t enough. Check your refund, warranty and advertising practices align with the ACL, including clear and accurate claims and compliant warranty statements where relevant.
• Letting ASIC governance slide: Missed filings and undocumented solvency assessments can create director risk. Bake your solvency resolution and ASIC review into your SOFY calendar.
• Verbal promises to staff: If you’re altering roles, bonuses or working arrangements, document them in updated Employment Contracts and policies to avoid future disputes.

Key Takeaways

• The start of financial year in Australia is the ideal time to review your structure, governance, contracts and policies so you’re compliant and ready to grow.
• Lock in ASIC and governance essentials early - record your solvency resolution, update company details and tidy your registers.
• Update employment settings before new projects start - current Employment Contracts and aligned workplace policies reduce risk and confusion.
• Refresh customer, supplier and online documents - your Terms of Trade, website terms and warranties should reflect real-world processes and ACL obligations.
• Strengthen privacy and data practices - ensure your Privacy Policy and incident plan match how you actually collect and use data.
• If your business is evolving, consider whether a company structure, an updated Company Constitution and a clear Shareholders Agreement will better support your next stage.

If you’d like a consultation on getting your start of financial year legal checklist sorted for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.