June 8, 2026
As 30 June approaches, most businesses focus on tax, reporting and year-end numbers. That makes sense. However, EOFY is also one of the most useful points in the year to step back and assess legal risk.
In our experience, many legal problems do not start with a major dispute. Instead, they begin with a contract that no longer reflects the way a business operates, an employment arrangement that has drifted out of date, or a compliance issue that has been left for another quarter. By the time the new financial year is underway, those issues can become more expensive, more disruptive and far harder to contain.
EOFY offers a natural opportunity to review the legal foundations of a business. In Australia, the financial year runs from 1 July to 30 June, and government guidance treats EOFY as an important period for getting business records, reporting and planning in order.
Why EOFY is a legal checkpoint, not just a financial one
A strong EOFY process should not stop at accounting. It should also consider whether the legal documents, internal processes and structures behind the business still match current operations.
That matters because businesses evolve quickly. Staff responsibilities change. New suppliers come on board. Projects expand. Roles blur. Trading terms get reused. Yet the contracts, policies and company records that once looked adequate can lag behind. As a result, the legal position at the start of a new financial year may be weaker than it appears.
We work with businesses on all levels, from start-ups and SMEs to larger companies, and our approach is practical and commercially focused. Maguire & McInerney’s Business & Company Law team is built around helping businesses minimise risk while improving performance, not simply reacting once a dispute has already taken hold.
Outdated contracts that no longer reflect the business
One of the most common EOFY mistakes is assuming existing contracts are still “good enough”.
Contracts often remain in circulation long after the business model has changed. Payment terms may no longer suit current cash flow. Scope descriptions may be too vague. Renewal clauses may roll over without review. Restraint clauses may be poorly drafted. Dispute resolution provisions may be silent or impractical. Over time, that creates unnecessary exposure.
Government guidance for Australian businesses is clear that well-written contracts help parties understand what to expect and protect business interests.
At EOFY, it is worth reviewing:
- customer and supplier agreements
- contractor and subcontractor terms
- service agreements
- credit terms and debt recovery clauses
- shareholder or partnership arrangements
- lease and occupancy documents where relevant
Where disputes do arise, they often centre on enforcement, interpretation and unpaid debts. That aligns closely with the work of our Commercial Litigation team, which regularly assists with contract disputes, debt recovery and partnership issues.
For businesses already dealing with slow payment or a judgment debt, our article on How to Enforce a Judgment in NSW: Practical Steps is a useful related read.
Employment arrangements that have drifted out of date
EOFY is also a sensible time to examine employment settings. This is especially important where the business has grown quickly, changed staffing models or expanded responsibilities without updating documentation.
Employment contracts should do more than confirm pay. They should clearly set out matters such as duties, termination terms, leave-related provisions, dispute processes and, where appropriate, restraint clauses. Maguire & McInerney’s employment law guidance notes that contracts often need to be modified as businesses change, new roles are created and structures evolve.
Record-keeping is another area that is often overlooked until a complaint or audit arises. Fair Work states that employers must keep certain employee information and provide pay slips, while employees must receive a pay slip within one working day of being paid. business.gov.au likewise identifies employee records, payslips, timesheets and rosters as required records.
That means EOFY is a useful time to ask whether:
- employment contracts reflect current roles
- payroll records and pay slips are accurate
- contractor arrangements are clearly documented
- workplace policies are current and consistent
- complaint handling procedures are understood internally
For businesses reviewing staff risk more broadly, our Employment Law page and related article topics on workplace complaints and unfair dismissal sit naturally alongside this discussion.
Compliance gaps that become more serious over time
Another common mistake is treating compliance as an administrative task rather than a legal risk issue.
For companies, ASIC states that changes to company details, officeholder details, shares and shareholders must be notified, and most changes must be reported within 28 days. ASIC also points directors to their ongoing obligations, while ABRS confirms that eligible directors need a director ID.
In practice, EOFY is often when businesses discover that records have not kept pace with reality. A shareholder change may not have been properly documented. An officeholder update may be overdue. A restructure may have been discussed commercially but not implemented legally. Those gaps can cause difficulties later, especially when finance, disputes, asset protection or succession planning become relevant.
The same logic applies to record keeping more broadly. The ATO says businesses need records that support tax, super and registration obligations, and EOFY guidance highlights getting records ready as a core year-end task.
Business structure issues left unchecked
EOFY is also one of the best times to ask whether the current business structure still serves the business properly.
A structure that made sense at start-up may no longer fit once turnover grows, key personnel change, assets accumulate or risk expands. Likewise, businesses that have added new trading activities, brought in family members, admitted partners or shifted responsibilities may need more than an accounting review. They may need legal restructuring advice.
Maguire & McInerney’s business law team expressly advises on structuring, contracts and company law matters, and its business law FAQs note that restructuring can involve different processes and notifications depending on the change.
This is often where small issues become large ones. If ownership, authority or obligations are unclear, disputes can emerge at exactly the wrong time. Our article archive already reflects that risk in business-focused topics such as Breach of Fiduciary Duty: Protecting Your Rights in Business Relationships.
Why delaying legal review can cost more
When legal issues are left until after 30 June, the business often carries those risks into the new financial year without a plan.
That can lead to:
- preventable disputes over contracts or payment
- employment claims linked to poor documentation or process
- regulator issues caused by outdated records
- avoidable costs in enforcing rights that could have been protected earlier
- management distraction at a time when the business should be focused on strategy and growth
By contrast, early legal review creates options. It allows businesses to tighten contracts before a deal sours, address process problems before a complaint escalates and correct structural issues before they affect liability, governance or decision-making.
A simple EOFY legal review can set up the year ahead
EOFY does not require a complete legal overhaul. In many cases, a targeted review is enough to identify where attention is needed.
A practical review before 30 June can help confirm whether contracts remain fit for purpose, employment documents reflect current roles, compliance records are current and the business structure still aligns with the way the business now operates.
That kind of review can also help set priorities for the new financial year. Instead of carrying uncertainty forward, the business enters July with greater clarity about risk, obligations and next steps.
Move into the new financial year with greater confidence
The most common legal mistakes at EOFY are rarely dramatic. More often, they are the quiet issues that build over time: outdated contracts, incomplete records, drifting employment arrangements and unchecked structural risks.
Left alone, those issues can lead to disputes, financial loss and ongoing disruption. Addressed early, they can often be managed with far less cost and far better outcomes.
For businesses wanting to use EOFY as a practical legal reset, our team can assist with contract reviews, employment documentation, business structure advice and dispute risk planning. To discuss a tailored EOFY legal review, contact Maguire & McInerney through our contact page.
