What is the SIC code?

When you register a new company in the UK you will be asked to select the business activities from a list. As a large proportion of new incorporations opt for model articles, the constitutional documents do not include each company’s purpose or specific business activity. Therefore you are asked to provide the most appropriate SIC code for your company.

SIC stands for Standard Industrial Classification and is a 5 digit numerical code. Each business sector starts with two particular digits, for example all codes relating to companies within “Transportation and Storage” start with two digits between 49 to 53. The latter three digits then narrow down the scope of the business. For example 49500 is for those involved with “Transport via Pipeline”. It is a long list and providing more examples will just be a list of numbers. Each number is unique to a specific business activity and there is a level of organisation to each sector. The complete list of codes is available here.

You can have just one or multiple codes for each company and they can be changed as required when you file Confirmation Statement. If none of the codes suit your business, or you would prefer not to select a descriptive code, then you can select 82990 “Other business support services activities not elsewhere categorised”.

Many companies do not trade and immediately and may be left dormant for many years. If you are forming your company just to protect the name or don’t intend to trade in the near future, then you can choose code 99999 “Dormant Company”.

The list does change and adapt to different business activities and evolution of markets. 30 years ago 47990 Retail sale via mail order houses or over the internet” was a few words shorter and codes regarding the sale of computer paraphernalia non-existent. This is why no two categories run into each other. There are a few numbers spare between each one just in case. It will take a long time for anything to disappear off the list but markets move fast so room for adaption is important.

So if they are so fluid why have them in the first place? The system has been in existence for well over 60 years and was first introduced in order to allow easier collation of economic movement and business growth. It also encourages uniformity of information to make the data itself more straightforward to analyse. For instance, if there has been a huge rise in formation of, say, pharmaceutical firms in the past 5 years, SIC codes help that to be easily recognisable and reportable and feed into the reports and information we hear about the changing shape of the business landscape.

It is important to note that the SIC code is not restrictive. It is simply providing data to the government. If your business model changes, then you can update the SIC codes at Companies House periodically. For most businesses, simply select a code that best suits your business and do not worry if your business changes direction.