After the era of the industrial revolution, corporations, having a variety of forms, proliferate throughout the world to a great extent. Those entities, albeit begun insignificantly, are playing a crucial role in the social and economic life of the modern society. The corporations, structured once, may not continue in the same form and size as they were initially incorporated. The corporate reorganization is one of the incidents that companies will undergo in any stage of their life to enhance the success of the company or to escape from financial distress and liabilities. The reorganization may take the forms of ownership restructuring, legal restructuring, and financial restructuring. Nowadays, relatively speaking, the reorganization has become a common practice in Ethiopia. Several laws and institutions are in place to regulate the restructuring of companies. The increasing cross border acquisition, privatization of state-owned enterprises and the growing interest in private equity and venture capital, more than any other time, seeks a study on its legal framework. This research tried to see the regulation of reorganization under the existing company law and tax laws of Ethiopia. However, there are no pieces of literature developed on the area nor the subject has given the attention it deserves. This study analyzed the regulation of corporate reorganization under Ethiopian law and emphasized its tax treatment under the tax law. To that effect, the researcher employed qualitative data collection and analysis methodology. The commercial code and several tax legislations have been consulted; the researcher has also interviewed experts at the MoR, MoF, MoTI, DARA, and TCCPA. Tax experts at the private firms have also been consulted. The main findings of the research are the existing company law of Ethiopia governing corporate restructuring is inadequate and the draft commercial code rectified the problem. The tax implications of all kinds of restructuring are not well addressed under the income tax law; the VAT law lacks clarity with respect to reorganization. Even though the income tax law provides for tax-free reorganization it does not have standards to determine the tax avoidance motive of taxpayers in advance. Other tax administration matters on reorganization are cumbersome and take a too long time to complete the transaction. Based on the findings, the research recommends measures to be adopted by the government. The researcher called for the law to strike the right balance between the right of reorganization originated from the business purpose of the parties and the possible tax planning activities