§ 11-06 Corporations as Limited Partners.
RCNY § 11-06
(a)Subject to the provisions of paragraph (b) and (c) of this section, a corporation shall be deemed to be doing business in the City if it owns a limited partnership interest in a partnership that is doing business, employing capital, owning or leasing property, or maintaining an office in the City.
(b)A corporation whose only contact with the City is the ownership of a limited partnership interest in a limited partnership that is doing business, employing capital, owning or leasing property, or maintaining an office in the City will not be deemed to be doing business in the City if the partnership is a publicly-traded partnership as defined in § 7704 of the Internal Revenue Code unless: (1) the corporation is actively engaged in the conduct of the partnership's business; (2) the corporation effectively controls the partnership; or (3) any general partner is effectively controlled by the corporation.
(c)A corporation whose only contact with the City is the ownership of a limited partnership interest in a portfolio investment partnership will not be deemed to be doing business in the City unless: (1) the corporation is actively engaged in the conduct of the partnership's business; or (2) the corporation effectively controls the partnership; or (3) any general partner is effectively controlled by the corporation; or (4) the corporation entered into the limited partnership arrangement not for a valid business or economic purpose, but for the principal purpose of avoiding or evading the payment of tax.
(d)For purposes of paragraph (c) of this subdivision, the term "portfolio investment partnership" means a limited partnership that meets the gross income requirement of § 851(b)(2) of the Internal Revenue Code. The term "portfolio investment partnership" shall not include a dealer in stocks or securities (within the meaning of § 1236 of the Internal Revenue Code).
