Standard Industrial Classification (SIC) code, introduced in 1937, amended six times to identify different companies is an important identifier for businesses.
It’s a five-digit number which classifies businesses on the basis of industries like agriculture, mining, IT etc.
SIC codes are grouped into progressively broader industry classification- industry group, major group and division.
The first three digits denote the industry group and first two digits denote the major group the company belongs to.
There’s no denying in the fact that many new companies are daily adding up to the already existing large number of companies.
SIC codes are considered to clarify industry in the most precise manner. It is a standardized and meaningful way to measure, analyse and share data across its various agencies. Since based on common characters shared in assigned products, services and production.
SIC codes are required for state registration, federal registration, tax purposes, when filing your DUNS number, and when seeking eligibility for government contracts.
How SIC codes are useful for businesses?
- SIC codes help companies to identify potential customers by industry code.
- Specific market campaigns can be organised and customer research can be easily done when the market is identified.
- Companies can list the industries and customers to determine their ways of operation.
- SIC codes are specific and comprehensive.
- To identify competitors, public and private, SIC codes help to segment them.
- Companies that operate in a certain industry use a specific SIC code to specify certain industries when filing with the SEC.
- Government contracts can be easily identified.
- State and Federal Registrations, everything is made easier with the help of sic codes.
- Every industry has a different scale of tax, SIC helps in that matter also.
- Your business SIC code is like your identification number that is often asked for various applications and forms.
- Lenders use SIC codes to help identify the industry affiliation of your company. Therefore, it’s vital to ensure that you have the correct SIC code for your classification of business.
From plenty of companies, each of different type, it is difficult to find out one Target Company, to resolve this problem SIC codes helps.