When forming an LLC, it’s important to gather all relevant information, so your business is registered correctly. For example, one piece of information you may need is a NAICS code.
Read on to learn about NAICS codes, their use, and how to obtain one.
What are NAICS Codes?
NAICS stands for the North American Industry Classification System, which is used to classify businesses within the United States, Canada, and Mexico. This classification also enables governments to gather and analyze economic data.
NAICS codes are six-digit numbers that group businesses into various industries and sectors. Each business owner is responsible for self-assigning their own NAICS codes based on the nature of their business.
While a business typically has one primary NAICS code, it can have additional NAICS codes if it sells various goods and services.
How NAICS Codes Are Used
As a business owner, obtaining NAICS codes could give your company an advantage regarding funding and grants. Lenders often use NAICS codes to make industry comparisons and target small businesses for loan opportunities.
The federal Small Business Administration uses NAICS codes for certification purposes, which can also be used to determine if you’re eligible for grants and government contracts.
The government also uses NAICS codes for regulatory purposes. For example, in addition to obtaining important statistics on business activity, NAICS codes are used to ensure businesses comply with taxes and government contract renewals.
Do I Need a NAICS Code for My LLC?
While obtaining NAICS codes offers several benefits for LLC owners, they aren’t always required. However, these states require business owners to have a NAICS code to form an LLC:
- New Hampshire
- New Mexico
How To Get a NAICS Code
The process of self-assigning a NAICS code is relatively straightforward and can be completed in just a few steps:
- Visit the NAICS website.
- On the left of the landing page, type in your business industry keywords inside the NAICS Code/Keyword Search bar.
- You’ll then be brought to a search results page where you can explore all related codes.
- Drill down further to learn more about each code and determine which is the best fit for your business.
While a NAICS code is not a requirement in every state, it’s best to have one for your LLC. A NAICS code can help you obtain business funding and access government grants and contracts.
To get your NAICS code, head to the NAICS website. It only takes a few minutes to put your business on the path to success.