If you run a small business or startup, the lead-up to the next financial year is more than just an accounting milestone - it’s a chance to reset, tidy up risk areas, and make sure your legal foundations actually match how your business operates today.
A lot can change over 12 months. You might have hired your first team member, started selling online, added a co-founder, expanded into a new state, changed suppliers, or launched a new product. If your legal documents and compliance haven’t kept up, the start of the next financial year is a practical time to catch up (before small issues become expensive ones).
Below is a practical, business-owner-friendly legal checklist you can work through to get your business ready for the year ahead.
1) Confirm Your Business Structure Still Fits Where You’re Headed
Many businesses start simple - but as you grow, your structure can become the difference between “manageable risk” and “personal liability risk”.
Sole trader, partnership or company: does your current structure still make sense?
Before the next financial year starts, take a step back and check whether your current structure still matches your plans:
- Growth plans: Are you bringing in investors, adding new owners, or expanding rapidly?
- Risk profile: Are you taking on larger contracts, higher-value clients, or more compliance obligations?
- Admin reality: Are you actually operating like a company (even if you didn’t set up as one)?
If you’re operating as a company, you should also confirm your internal governance is in order - things like your constitution and shareholder rules shouldn’t be an afterthought once there’s money and decision-making on the line.
For many startups and SMEs, getting your Company Constitution right is part of making sure decisions, share issues, and director powers are clearly documented (instead of being argued later).
If you have multiple founders (or plan to), document it properly
If there are two or more owners, it’s worth checking you have a clear agreement that covers how decisions are made and what happens if someone wants to exit.
A well-drafted Shareholders Agreement can help prevent common “next year problems” like deadlocks, unexpected share transfers, and disputes about roles or contributions.
2) Refresh Your Contracts: Customers, Suppliers, and Partnerships
One of the most useful “legal spring cleans” you can do before the next financial year is reviewing the contracts you rely on to get paid, deliver work, and manage operational risk.
Contracts often start as a quick template, a one-page quote, or “terms in an email”. That might work early on - until there’s a disagreement about scope, timeframes, payment, delays, refunds, IP ownership, or liability.
Customer-facing terms: are you protecting revenue and managing expectations?
If you sell services, consider whether you have a customer agreement that clearly sets out:
- What’s included (and what’s not included) in your scope
- Pricing, deposits, milestone payments, and late fees
- Change requests and variations
- Timing, delivery, and client responsibilities
- IP ownership (who owns what, and when)
- Liability limits (where appropriate and enforceable)
If you don’t have something tailored yet, a properly drafted Service Agreement can be a strong starting point for reducing disputes in the year ahead.
Supplier and contractor arrangements: don’t rely on “goodwill”
If a supplier is critical to your ability to deliver, or if contractors represent your brand to customers, you want clarity around:
- What is being supplied and to what standard
- Delivery timelines and consequences of delays
- Confidentiality (especially for pricing, customer lists, or product info)
- Who owns IP created by contractors
- Termination rights (and notice requirements)
Many startups also forget to check whether their contractor arrangements match how the person is actually working day-to-day. In Australia, the contractor vs employee question is fact-specific and can be nuanced - and the label in the contract isn’t decisive if the practical reality points the other way. If someone looks and operates like an employee in practice, you could be exposed to employment law risks even if the contract says “contractor”.
If you’re collaborating (or entering joint projects), define the relationship
Collaborations are common - co-marketing, product partnerships, referral deals, joint tenders. They can also go sideways quickly if nothing is written down.
Before the next financial year, check whether each collaboration has clear written terms about:
- Roles and responsibilities
- Who pays what
- Who owns the outputs (content, IP, customer data)
- How you handle disputes and exits
3) Check Your Employment Setup Before You Hire (Or As You Scale)
Employment issues tend to escalate quickly - and they’re often the kind of risk that only shows up after something has already gone wrong.
If you’re planning to hire in the next financial year (or you already have a team), it’s worth taking time now to ensure you’ve got the fundamentals right.
Employment contracts: do they match the role and your obligations?
Even if you have a “standard contract,” check whether it’s still fit-for-purpose:
- Correct employment type (full-time, part-time, casual)
- Hours of work and flexibility expectations
- Confidentiality and IP clauses
- Probation terms (where appropriate)
- Termination processes and notice
A tailored Employment Contract can be particularly important if you’re moving from founder-led operations to a team-based business where performance, data, and customer relationships need protection.
Workplace policies: are they clear enough to rely on?
Policies are often ignored until you need them. If you want to actually enforce workplace expectations, policies should be current and communicated.
Depending on your team and operations, you might consider updating policies around:
- Confidentiality and information security
- Use of company devices and accounts
- Workplace behaviour and complaints processes
- Workplace surveillance (if you use cameras or monitor communications)
If your business uses cameras in a shop, warehouse, or office, make sure you’re not missing state-based rules and notice obligations - workplace surveillance and privacy compliance can be more nuanced than people expect.
Contractors vs employees: reduce misclassification risk early
In startups especially, it’s common to engage contractors for flexibility. But in Australia, the legal characterisation depends on the whole relationship (and the terms of the contract, as well as how it’s carried out in practice). Because this area has evolved and can be complex, it’s worth checking your arrangements before the next financial year - particularly for long-term or key roles - so your documentation and day-to-day practices line up.
Consider reviewing your current engagements, especially if you have people who:
- Work regular hours set by you
- Are integrated into your business like staff
- Only work for you (or mostly for you)
- Use your equipment and systems
This is a good moment to align your documentation and practices so you’re not carrying unnecessary risk into the year ahead.
4) Get Privacy, Data, and Marketing Compliance in Order
For most SMEs and startups, the year ahead will involve more digital activity: more online sales, more email campaigns, more CRM use, more customer data. That’s exactly why privacy and data handling should be on your legal checklist.
Personal information can include names, emails, phone numbers, addresses, and sometimes more sensitive data depending on your industry.
If you collect personal information through your website, onboarding forms, mailing lists, booking platforms, or apps, you should have a clear, up-to-date Privacy Policy.
In Australia, it’s also worth noting that some small businesses may be exempt from parts of the Privacy Act 1988 (Cth) (for example, many businesses with turnover under $3 million) - but the exemption has limits and exceptions, and other privacy obligations can still apply depending on what you do (including industry rules and contractual requirements). From a practical perspective, your privacy approach should match what you’re actually doing (not what you think you’re doing). Before the next financial year, it’s worth checking:
- What data you collect and why
- Where it’s stored (and who has access)
- Whether you disclose it to third parties (e.g. payment providers, CRMs, analytics tools)
- How long you keep it for
- How you respond to complaints or access requests
Website terms and online sales: set the rules of engagement
If you sell online, run a platform, or even just accept enquiries through a website, you should consider whether your website terms reflect your real business rules.
Depending on your setup, this could include things like acceptable use, limitations on liability (where appropriate), and how users can access or use your content and services.
Email marketing and customer outreach: don’t overlook compliance
This is also a good time to audit your marketing practices, especially if you’re scaling. In Australia, email and SMS marketing is regulated (including under the Spam Act 2003 (Cth)), so it’s worth checking:
- Are you only sending marketing messages with consent (express or inferred, where permitted) and to the right audience?
- Do your messages include a clear unsubscribe function that actually works?
- Are you clear about who is sending the message?
Marketing is often handled by busy founders or outsourced teams, but legal responsibility still sits with your business.
5) Review Your IP, Branding, and Ownership of What You’re Building
When you’re pushing hard for growth, it’s easy to forget that your brand and IP are often your most valuable assets - especially for startups.
Before the next financial year, it’s worth taking stock of what you’ve created and whether it’s properly protected and properly owned.
Do you own your website, code, designs, and content?
A common trap: a contractor builds your website, designs your brand, writes your copy, or develops software - but your agreement doesn’t clearly assign ownership of the intellectual property (IP) to your business.
This can cause problems later if you:
- Try to sell the business
- Raise investment (and investors ask for proof you own your IP)
- Have a dispute with the creator
- Want to reuse or modify work
If you’ve engaged third parties to build key assets, review those agreements now so you go into the year ahead with clean ownership.
Trade marks: is your brand protected (or just “in use”)?
Using a name doesn’t automatically give you the strongest protection. Trade mark registration is often how businesses protect names, logos, and brand identifiers.
If you’re investing in brand awareness over the next financial year - new packaging, a rebrand, paid ads, influencer work, or expansion - it’s worth considering whether your trade mark strategy is where it needs to be.
Customer lists, pricing, supplier terms, product roadmaps, and internal processes are valuable.
If you’re sharing confidential information with collaborators, suppliers, or potential investors, it’s worth using an NDA where appropriate and ensuring your contracts clearly deal with confidentiality and permitted use.
Key Takeaways
- The next financial year is a great time to align your legal setup with how your business actually operates today - especially after growth, hiring, or product changes.
- Review your business structure and ownership documents so you’re not carrying unnecessary risk into the year ahead.
- Refresh customer and supplier contracts to reduce disputes over scope, payment, delays, IP ownership, and liability.
- If you’re hiring (or already have a team), make sure your employment contracts and policies are current and match the real working arrangements.
- Privacy and data compliance should be treated like a core business system, particularly if you’re scaling online sales or marketing in the year ahead.
- Protect what you’re building by confirming IP ownership (especially contractor-created work) and considering trade mark protection as you grow.
Note: This article is general information only and isn’t legal or tax advice. For EOFY and tax-specific questions, it’s best to speak with your accountant. For advice tailored to your business, get legal advice.
If you’d like a consultation on getting your business legally ready for the next financial year, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
