To incorporate an LLC, certain jurisdictions need a North American Industry Classification System (NAICS) designation. Having one allows you to apply for government grants and acquire contracts.
This tutorial will define an NAICS code and explain how to get one for your LLC.
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What Exactly Are NAICS Codes?
A NAICS code is a six-digit code that is self-assigned. These codes categorise enterprises as sectors, subsectors, or industries.
NAICS is an abbreviation for North American Industry Classification System, which is used to categorise enterprises and corporations in the United States, Canada, and Mexico in order to monitor and evaluate economic activities.
Is an NAICS Code Required?
A NAICS code is not required in every state to create an LLC. It is critical to understand if your state needs one, otherwise you may be unable to proceed with formation.
The following states need an NAICS number for formation:
Connecticut, Alaska
Mississippi
State of New Hampshire
How Do You Make Use of NAICS Codes?
NAICS numbers may assist you establish whether your company is qualified for government grants and contracts, as well as Small Business Administration accreditation.
These codes may also assist you get a loan from a commercial lender that compares industries to discover and pick the best small companies for their loans.
How Does the Federal Government Make Use of NAICS Codes?
NAICS codes are used by the government for a variety of regulatory and administrative objectives. This categorization method is intended to create subcategories so that the SBA can appropriately assess which firms qualify for a small business loan.
Other objectives include the following:
Codes from enterprises in all sectors, including public administration, are used by federal and state governments to assure compliance on different levels, including administrative, contracts, and taxation.
NAICS codes assist the government in collecting, organising, and analysing information on different industries, as well as in releasing economic statistics.
Where Can I Find My NAICS Code?
It is simple to get an NAICS code that corresponds to your company type. The procedures below will assist you in rapidly locating your NAICS number so that you may use it when forming your LLC:
Go to the NAICS website.
Search for your desired industry in the “NAICS Search” bar (e.g., restaurant, plumbing, etc.)
To discover more about a certain code, choose the NAICS title that best fits your company’s activities.
Note: If your company does various activities, you may choose a secondary NAICS number, since more than one code can be chosen by a single company.
If you still need assistance locating your particular code, contact the US Census Bureau at 1-888-756-2427.