Starting a business is an exciting adventure, but there is no denying the paperwork maze you must navigate first. Choosing the correct Standard Industrial Classification (SIC) code is one seemingly small step that can trip you up. This number actually plays a significant role in how your company is categorised and understood by Companies House.

Choosing the right one ensures you are seen in the right light, grouped with your industry peers, and tracked accurately in the grand scheme of things. But with over 700 codes out there, ranging from the every day to the slightly whimsical, it can feel overwhelming, ensuring you choose the right one.

Our team at Your Company Formations is here to help guide you through the process of choosing the perfect one for your business. We will:

• Unpacking the SIC system: What exactly are these codes, and why do they matter? We will break down these business identifiers' structure, levels, and purpose.
• Navigating the jungle of codes: Feeling lost in the alphabet soup of activities? We will equip you with tips and tricks to find the code best for your unique business.
• Choosing with confidence: No more guesswork! We will walk you through selecting the proper codes, ensuring you are classified accurately and efficiently.

What is a SIC code?

When forming your company in the UK, a vital step involves selecting your Standard Industrial Classification (SIC) code. This five-digit identifier is not just any old random number; it serves as your business's official economic "fingerprint," categorising your primary activity within the national register. Choosing the correct SIC code ensures that your company is accurately represented and grouped with relevant industry peers, promoting transparency and facilitating economic analysis.

While the "C" in SIC might tempt you to interpret it as "code," it actually stands for "Classification." Remember, your SIC code is more than just a label; it's a critical piece of information readily accessible to the public via Companies House records. Therefore, selecting the most appropriate code deserves careful consideration. Here at Your Company Formations, we understand the importance of navigating the nuances of SIC codes.

What is my company's SIC code?

When starting the exciting journey of forming your company, the question "What is my company SIC code?" inevitably arises. The answer lies within a comprehensive taxonomy known as the Standard Industrial Classification codes list. Imagine it as a meticulously organised library, with each section (A-U) representing a broad industry category, such as Agriculture or Transportation.

Within these sections, you will find further subdivisions tailored to specific activities, like Taxi operation or Freight rail transport. This nested structure ensures every legitimate business finds its rightful place within the classification system.

You unlock a range of benefits by diligently identifying the most fitting SIC code for your company. Not only does it facilitate statistical analysis and industry-specific insights, but it also ensures transparency and clarity for stakeholders, including potential investors and customers.

The SIC codes list empowers you to accurately represent your unique business within the broader economic landscape with its well-defined categories and subcategories.

Does my company need more than one SIC code?

While a single SIC code may often sufficiently capture a company's primary activity, more complex or multi-faceted businesses may benefit from selecting up to four codes to cover their needs.

This flexibility allows for nuanced representation, particularly when a single code falls short of encompassing a company with more diverse operations. For such companies, a carefully chosen combination of codes will more accurately reflect their multi-faceted nature, ensuring comprehensive categorisation and enhanced transparency.

When do I need to choose a SIC code?

Here is a breakdown of when you need to obtain or make changes to your SIC code:

• Company Incorporation: Your first encounter with SIC codes will occur at the very beginning of your journey during company incorporation. Providing at least one SIC code is mandatory for Companies House to process your application. Choosing the correct code at this early stage is foundational in accurately classifying your business within the national register.
• Updating SIC Codes: While an initial code selection is crucial, it's important to remember that your business may evolve over time. Should your core activities or areas of focus shift, updating your SIC code(s) ensures continued accuracy and transparency. However, there's no need to rush: your updated selection can be easily included in your next annual confirmation statement to Companies House.
• Confirmation Statements: The annual confirmation statement is a crucial checkpoint for reviewing and updating your company's information with Companies House. If your SIC code(s) have stayed the same since the previous statement, there's no need to update them. However, any alterations in your primary business activities should be reflected in your chosen code(s) and included in the subsequent statement. This is particularly relevant during a company's initial year, as actual trading experiences may differ from initial predictions.
• LLPs and SIC Codes: Unlike companies, limited liability partnerships (LLPs) are not subject to the SIC code requirement. This exemption applies both at the formation stage and throughout the LLP's lifecycle, eliminating the need to choose or update code(s) on confirmation statements.

Remember, a carefully chosen SIC code is vital for your business within the UK's economic landscape. While initial selection holds importance, the system also offers flexibility to adapt to your evolving business, ensuring continued accuracy and transparency throughout your entrepreneurial journey.

Finding my company's SIC code

If you have not previously submitted a SIC code to Companies House or if the existing one no longer represents what your company does, you will need a way to find the right one to use for your company.

This can be a challenge. You can't just say, 'We make those brushy things that go on the end of your hoover'. You would have to find the most appropriate code on the list, which might be 22290 'Manufacture of other plastic products' or 32910 'Manufacture of brooms and brushes'.

Companies House has a handy keyword search tool for finding the best SIC code for your company. You can type in words that relate to what your company does, and it will offer suggestions from the official SIC code list.

Conclusion

While choosing the most fitting SIC code for your business is essential, navigating the options can feel like piecing together a puzzle. Here at Your Company Formations, we understand the potential for uncertainty. Rest assured, Companies House generally recognises that selecting a code in good faith, even if not ultimately the perfect fit, is a common experience.

Moreover, you can refine your code selection as your business evolves. Any adjustments can be conveniently incorporated into your next confirmation statement. Remember, our goal is to empower you to register your company confidently, and we are here to guide you through every step of the process, including navigating the SIC code landscape.

Further recommended reading:

Are you starting a new company? Learn the importance of meticulous record keeping in our post: What Records Must a Limited Company Keep?

Do you need clarification about the official numbers attached to your business? Read our post: This Is How Your Company Tax Number and Company Number Are Different, to understand more.