How Shelf Companies Lost Their Appeal and What to Do Now
Also known as a ready-made company or an off-the-shelf company, a shelf company is a pre-registered business you can buy and customise.
Your Standard Industrial Classification (SIC) code is an important part of classifying who you are and what you do as a company. When you open your company you will have a SIC code that you will submit along with your annual returns. HMRC, Companies House, and the Office for National Statistics (ONS) carry important information about the businesses in the UK. It’s a legal requirement to have a SIC code if you are running a company.
But if you’ve already submitted the documents required to form a company how are you supposed to change this information? This guide is going to show you how to do it.
What is a SIC Code?
You’ll be surprised at how many people have no real idea what a SIC code is. This tends to be one of those fields people fill in when forming a company that people don’t understand. To be fair, it’s not a critical part of your company, but you still have to get it right.
One of the mistakes to avoid when forming a new company online is to type in the wrong SIC code. Luckily, you do have the option to change it.
Why Would You Need to Change Your SIC Code?
There are many reasons why you may want to change your SIC code. The main reasons include:
- You entered the wrong SIC code when you established your company. This is easy to do if your business carries out multiple forms of work. And many of these SIC codes are extremely vague.
- Your business has expanded and you want to incorporate new SIC codes into your company. You can actually have up to four industrial SIC codes.
- Your principal business has changed.
Change Your SIC Code with Your Annual Return
You don’t have to give a reason why you want to change your SIC code. Your annual return allows you to change your SIC code for absolutely any reason. There’s no legal requirement for you to change your SIC code before you submit your annual return. Some companies decide to submit an early confirmation statement, though.
If you’ve opened your new company, you’ll be able to find your company’s SIC code on the Companies House website. Older companies will need to look back at an earlier version of the SIC codes produced by Companies House. In this situation, you will have to change your code so it fits in with the latest list of codes.
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Only Your Main Business Matters
One area that always confuses new managing directors is what counts as their ‘principal business’. The easiest way to think about this is the main part of your business. Consider what brings you the most income every single year. Anything else is just a side business and doesn’t need to be mentioned in this case.
But why would a company have multiple SIC codes?
There are multiple reasons why this could be the case. One reason is your income is relatively split between a range of different types of business activity. For example, if you have a 70:30 split between two different businesses this would justify using two SIC codes.
You also may decide to setup multiple brand names. A lot of the companies you see today are no more than subsidiaries of the main company. They may have their taxes submitted separately, but they ultimately fall under the same umbrella. This would justify having more than one SIC code.
Don’t Worry About It
This can turn out to be a confusing subject, but there’s no real need to worry about whether your SIC code is the most accurate one available. There are lots of SIC codes you can use, and some companies can even fall under the same SIC code. But what you have to remember is Companies House aren’t going to hunt you down if you get it wrong. This is not vigorously enforced.
To make sure you get it right you should talk to a formations agent. They will be able to tell you which category your business best falls under. They will also be able to advise you on whether you should have multiple SIC numbers or whether it would be better to bundle it all into one.
Have you ever changed your SIC number before?
