Before setting up your car dealership business, you will need to incorporate your company. 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 codes on the list of 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 car dealership business.
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 United Kingdom (UK) companies. The condensed UK SIC code list maintained by Companies House is available on the gov.uk website. A private limited company (the most popular type) can have multiple SIC codes. Dormant companies and non-trading companies are also required to have a SIC code.
Your car dealership business can have multiple SIC codes if it has multiple business activities. SIC codes can also be updated via a confirmation statement if ever the business’ activities evolve or you carry-out new activities.
What SIC code should I use for my car dealership?
The SIC code you select for your car dealership will depend on what types of vehicles you sell and whether you carry out any work on those vehicles.
Selling vehicles
If your dealership sells new cars (and light motor vehicles) then you will need to use the SIC code 45111. Conversely, if your dealership sells used or second hand vehicles then you will need to use the SIC code 45112. If your dealership sells anything other than cars and light motor vehicles then you will need to use the SIC code 45190.
Repairing vehicles
If your dealership that also offers repair services then you will also want to use the SIC code 45200 which covers the maintenance and repair of motor vehicles. If your dealership deals with the sale, maintenance and repair of motorcycles (including related parts and accessories) then you will want to use the SIC code 45400.
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Renting vehicles
If your dealership also leases or rents cars and light motor vehicles then you will need to use teh SIC code 77110.
Sale of parts
Finally, if your dealership is involved in the wholesale trade of motor vehicle parts you will need to use the SIC code 45310 or SIC code 45320 if your dealership is involved in the retail trade of these parts or accessories.
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Conclusion
Once you have navigated the industry classification system and chosen a SIC code for your car dealership 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.