Changes of legal form are regulated by an omnibus

All forms of corporate reconstructions, mergers, splits, spin-offs, drop-downs,
and changes of legal form are regulated by an omnibus Reconstructions Act. In
many cases, these manoeuvres can even be done free of tax. Broadly speaking,
provided the proper formalities and procedures are observed, any corporation
may change its legal form to that of another corporation without immediate tax
or other consequences, and a corporation may change to a partnership and vice
versa, at least without having to recognise a taxable capital gain.

Similarly,depreciation policies and valuation options will be carried over into the new
entity, although there may be noticeable effects in connection with losses
carried forward or previously accumulated reserves now experiencing a change
of status. Branches, however, cannot generally be converted to corporations
without triggering a taxable gain for the previous owner (taxable as ordinary
trading income) and the down-grading of a corporation to a branch would be
seen as the liquidation of the corporation.