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Definition
A Standard Industrial Classification (SIC) code is a numerical code used to classify and categorise businesses based on their primary economic activities.
What are SIC codes?
The purpose of assigning SIC codes is to provide a standardised system for organising and analysing data related to different industries. SIC codes are particularly useful for statistical agencies, government bodies, researchers, and businesses seeking to understand economic trends, and conduct industry analysis.
SIC codes are typically four-digit numerical classifications that represent different sectors and industries. The first two digits broadly indicate the major industry group, while the third and fourth digits offer more detailed information about the specific activity or specialisation within that group.
In some jurisdictions, businesses are required to report their SIC codes when registering or filing official documents. This information helps regulatory authorities track and monitor economic activities within their jurisdiction.
Different countries may have their own variations of industry classification systems, such as the International Standard Industrial Classification (ISIC) used globally. These systems serve similar purposes but may have unique structures and coding schemes.
Example of a SIC code
Let’s consider a company, XYZ Furniture Manufacturing Co., which primarily manufactures and sells furniture.
The SIC code for furniture manufacturing would typically fall under code 2511. So, the SIC code for XYZ Furniture Manufacturing Co. would be 2511.
This code indicates that the primary activity of XYZ Furniture Manufacturing Co. is in the industry of manufacturing wood household furniture.
