When you get into a business activity and aspire to establish a company, there are quite a few textbook requirements that we all know we are expected to follow. Almost all entrepreneurs know they need to have a business plan and need to get their businesses registered under required laws. However, most newbies are not aware of an essential element, which is the Standard Industrial Code. This requirement should be submitted by every entrepreneur registering a company with a Company House. This guide to Company SIC Codes will help you understand everything that you need to know about SIC codes.
What is SIC?
Standard Industrial Classification codes are unique codes allocated to business activities to classify them into different categories. Government authorities are required to evaluate businesses according to their business activities to take various decisions and apply regulatory limitations such as taxes. It is difficult for a single authority to evaluate every single business for its business activities, every time they need to regulate it, therefore these standardized codes are developed to classify the businesses. When an entrepreneur forms a company and registers it, he is required to submit his Standard Industrial Classification Code depending on what is the nature of business and what business activities will take place. For example, a sports good trading company will have a separate SIC code while a software house will have a separate unique classification Code.
How Many SIC Codes Should You Submit?
Typically, every business needs only one SIC code according to the category that best describes its business activities. However, it is understandable that certain companies may have multiple product lines and may have more complex or multiple business activities. In that case, any business may submit up to a maximum of four Standard Industrial Classification Codes.
How to Find Your SIC-Code
If your company has been registered before June 2016 and if you have been filing your annual returns, you may find your SIC code on your annual return form. Interestingly, many existing business owners are unaware of this fact because they usually do not need to consider SIC codes during daily business operations, therefore they are not aware that they might have already selected a business activity classification for their business. However, if you are a new business or if you have not yet filed your returns, you may find out about your business SIC code using Inform Direct.
Changing the SIC Code
You may realize that the SIC code that you found on your return form is incorrect. Another possibility may be that the business activity that reflects your registered SIC code does not exist anymore and you have changed the nature of your business. In both cases, your SIC code will be invalid and you will be required to change your SIC code. You can change your existing SIC code to a new one by submitting a new Confirmation Statement to the Company House with an updated SIC code. You can do so either on an immediate basis or wait until it’s time to file your next return.
