For most M&A transactions, the consideration paid will consist of cash, stock, or a combination of the two. When the consideration consists, even in part, of stock or other securities, federal securities law applies.

I. Securities Registration

Section 5 of the Securities Act of 1933 requires every offer and sale of a security to be either registered with the Securities and Exchange Commission or qualify for an exemption from registration under federal securities law. Under the act, the term...