Before setting up your e-commerce business, you will need to incorporate your business. During the company incorporation process on Companies House, you will need to provide your company’s SIC code based on the nature of your business and services. There are over 600 SIC codes to choose from which can be overwhelming. This article explains what a SIC code is and how to choose one for your new e-commerce or online retail sale site.
What are standard industrial classifications?
A Standard industrial classification code (SIC code) is a five-digit business code which describes a company’s economic activities and business services. These codes help the Office for National Statistics (ONS) track the state and growth of UK companies. The condensed SIC code list maintained by Companies House is available on the gov.uk website. A limited company can have multiple SIC codes. Dormant companies and non-trading companies are also required to have a SIC code.
Your e-commerce business can have multiple SIC codes if they have multiple business activities. SIC codes can also be updated via a confirmation statement if ever the business’ activities evolves.
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What is the SIC code for E-commerce and online retail?
As e-commerce marketplaces have become increasingly popular, with companies such as Amazon and ebay leading the way, you won’t be surprised to hear that there is a particular SIC code devotes to the online retail trade.The SIC code for retail sales via mail order houses or via the internet is code 47910 and this therefore covers online sales and online stores.
As stated above, a business can have one or more SIC codes and this will likely be the case in retail sales. You should lookup what other others might match the nature of your business model.
For example, if your e-commerce platform is focused on producing women’s jackets, you might want to consider adding the SIC code 14132 which covers the manufacture of women’s outwear. Similarly, if your e-commerce company is focused on catering, you might want to consider using the code 56210 which covers event catering activities. Ultimately, to determine what additional SIC codes suit your e-commerce sales business, you can view the government’s classification system.
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Conclusion
Once you have chosen a SIC code for your business and finalised the incorporation process, you will need to generate legal contracts to structure your business activities. Creating lawyer-approved agreements can be costly and it can be tempting to download free templates online. However, this process is risky and unnecessary thanks to contract management platforms like Legislate. Legislate allows to tailor the essential agreements to hire and grow your business such as employment, consultancy and internship agreements. To create a lawyer-approved contract for only £9.95, sign up to Legislate today!
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.