By Mark Di Vincenzo

The most common legal mistake that small- and medium-size businesses make is not thinking enough about legal issues.

The five widespread mistakes that follow all have that in common.

Generally, legal matters are an afterthought - if they are given any thought at all - and it often costs businesses a lot of time and money to clean up the mess that results.

The fact is, small and medium businesses make a lot of legal mistakes, but here are the most common ones.

They dont know the law. There are lots of laws, and business people cant be expected to know the ins and outs of all of them. But they should have some understanding of the facets of business law that affect them, such as contractual law, employer-employee law, copyrights and trademarks, and securities laws, among others.

They dont understand the documents they sign. And they often dont understand the obligations they have as a result of signing those documents.

One attorney offered this example: "I had a client whose business was going under, and he said, Im leasing this copier. Can I get out of the contract? Well, the contract clearly states that he is obligated for several more years. Its really hard when business people dont know what theyre signing."

They cut corners on legal advice. A lot of small and medium businesses have no choice but to be frugal, and they may choose not to hire a lawyer when that would be the wise thing to do.

"This is huge, absolutely huge," said an attorney who works with businesses that dont have in-house legal counsel. "Some business folks are penny wise and pound foolish, and they dont know what they dont know, and it creates big problems for them."

They do business without adequate legal documents. This applies to contracts with customers, as well as operating agreements, which are equivalent to "a prenup for a business or a will," said the attorney.

"You should want to have control over what happens to your business if something does not go as planned, just as you should want to have control regarding your marriage or your estate."

Small businesses are more likely to enter into oral contracts with customers because they are happy to get some business and may think they will jeopardize the business if they require the customer to sign a contract. This is foolish.

They neglect intellectual property issues. This includes registering copyrights, trademarks, and logos. Business people need to make sure they are protected by protecting their intellectual property, including and especially if they have partners.

"I had a client who was a partner in a company that went under," said an attorney, "and some time later he wanted to use the trademark, but he couldnt because the trademark was in his partners name alone, not in both names and not in the name of the business."

If youre running a business, you cant overlook or neglect these and other legal matters. One legal mistake can cost you your business, so make sure you do the necessary research or hire someone who will do it for you.

Mark Di Vincenzo is a journalist with 24 years of experience and an author.