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Strike a Match

Offering company stock in your 401(k) plan can be risky business--learn how to avoid getting burned when playing with matches.

This story appears in the April 2005 issue of Entrepreneur. Subscribe »

Matching employee contributions in company stock in a 401(k) plan sounds like a surefire move. You gain a competitive tool for attracting and retaining talent and give employees more of a stake in the company's future success. At the same time, you give your a boost and get a tax break on the contribution without having to tie up precious cash.

"I think it's an excellent idea--if you know why you're doing it," says Jeff Robertson, attorney with , , corporate law firm Bullivant Houser Bailey PC. But too often, he says, owners are motivated by the tax break and fail to protect themselves from the fiduciary risk.

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