A partnership firm and an association of persons are said to be resident in India if the control and management of their affairs are wholly or partly situated within India during the relevant previous year. They are however, treated as non-resident in India if the control and management of their affairs are situated wholly outside India. A firm or an association of persons cannot be ordinarily or not ordinarily resident. The residential status of the partners/ members of the firms/ association are not relevant in determining the status of the firm/ association.

A company is said to be a resident in India in any previous year, if—

(i) it is an Indian company; or

(ii) its place of effective management, in that year, is in India

place of effective management” means a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made

An Indian company is always resident in India. A foreign company is resident in India only if during the previous year, place of effective management is situated wholly in India. Conversely, a foreign company is treated as non-resident if during the previous year,place of effective management is either is wholly or partly situated out of India. A company can never be ordinarily or not ordinarily resident in India. In case of a foreign company even the slightest place of effective management is exercised from outside India, it would be treated as a non-resident.