The National Industrial Classification Code, or “NIC Code,” is a statistical standard used to create and maintain a comparable database for a range of economic activities. The government created the NIC code to determine and analyse how each economic activity contributes to the country’s wealth.
A categorisation scheme based on the operations carried out by a firm is the NIC code. The NIC code is used by the government to categorise and identify companies based on their commercial operations. Every business activity has a distinct 5-digit code allocated to it. The five-digit NIC code represents the business activity’s sector and sub-sector.
Where are Nic codes used?
- Under the Micro, Small, and Medium Enterprise Development Act, micro, small, and medium-sized corporations must register on the Udyam site. To do so, a NIC code must be turned in.
- A company or limited liability partnership must be registered on the Ministry of Corporate Affairs Portal before it may be incorporated. Registration requires a firm NIC code, which is obtained.
What is the significance of the NIC code?
This is a collection of key points that illustrate the meaning of the NIC code. Let’s explore.
- Most Indian government agencies use it to ensure that enterprises are accurately categorised and to monitor a company’s business-related operations.
- To form a Limited Liability Partnership or a company, one must have a Udyog Aadhaar.
- Once your business has registered with the NIC, you may profit from any government program.
- Be sure to include the NIC registration number on all of your invoices so that the government can track your company.
How to apply for a NIC code to register an MSME?
NIC is necessary for MSME registration under the Udyog Aadhaar program. The following information must be entered: phone number, postal address, bank details, NIC code, essence of the business, name of the entrepreneur and company, activities of the MSME Unit, and Aadhar card number. One categorisation scheme that helps classify the business activities of various MSMEs is the NIC code in MSME.
The procedures for filling out the NIC code for MSME are listed below:
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Keyword-Based NIC Code Search:
- Start by searching for NIC codes using keywords. This entails entering inappropriate keywords associated with the business’s operations.
- A list of NIC Codes that correspond with the keywords you selected will be shown by the system.
- Select the NIC Code that most accurately sums up the main line of business for you.
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NIC Code Selection by Hand:
- As an alternative, you may manually choose the NIC Code by selecting a category based on the company’s activity, such as manufacturing or services.
- You will be asked to input the relevant two-, four-, or five-digit NIC codes after choosing the category.
- Make sure the NIC Code you submit corresponds to the kind of business you do.
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Modifying or Correcting the NIC Code:
- Don’t worry if you accidentally input the incorrect NIC Code. Before creating the acknowledgement, you have the option to update or change it on the Udyog Aadhaar form.
- Make sure that the NIC Code is accurate before submitting your application.
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Choosing Several NIC Codes:
- A company may sometimes engage in a variety of activities that are assigned to distinct NIC Codes.
- Multiple NIC Codes may be chosen and included in order to cover all business operations fully and properly.
- To add other NIC codes, click the “Add More” icon after choosing the “Manufacturing” or “Services” radio option.
- This guarantees that the variety of your company activity is reflected in your Udyog Aadhaar registration.
Generating Udyog Aadhaar NIC codes
Generating a Udyog Aadhaar NIC code is easy. You can do it using the official Udyam Registration page.
- Visit portal: Access the Udyam Registration site online.
- Enter details: Fill in company data, including PAN and Aadhaar information.
- Select NIC code: Choose the relevant NIC code that suits the company activity.
- Submit application: Submit the form to generate the Udyog Aadhaar NIC code.
- Receive certificate: Obtain the registration certificate with the NIC code.
Selecting the Correct NIC Code
It might be difficult to determine which NIC code is right for your company. Nonetheless, you may choose the best code for your business by comprehending the essential elements of the code system. To assist you in selecting the appropriate NIC code for MSME registration, follow these steps:
- Start by enumerating your company’s main operations. Consider the goods and services you provide and the procedures you follow.
- View the Ministry of Micro, Small, and Medium Enterprises’ official list of NIC codes. The list has various codes grouped into sections, divisions, groups, and classes.
- The NIC Code list is organised hierarchically, with each level offering more detailed information about a particular sector. The major economic sectors are represented by sections, which are further divided by divisions, and classes provide the most specific classifications.
- Look through the list and find the group, class, division, and/or section that most closely matches your company’s operations. Carefully review the descriptions given for each code to guarantee correctness.
- If your company produces a variety of commodities or participates in a number of different activities, choose the code that corresponds to your main business activity or the activity that generates the majority of your income.
- If you need help figuring out the right code, think about getting advice from experts or contacting your local industry group or the MSME Development Institute.
Conclusion
For small and medium-sized businesses, getting an NIC code under Udyog Aadhaar and applying for one are essential steps in the MSME registration process. In addition to aiding in the appropriate classification of firms, knowing how to apply for a NIC code for MSME registration opens doors to a number of government perks and schemes. Through manual selection or keyword-based searches, company owners may quickly find the relevant NIC Code that corresponds with their operations. The option to choose more than one NIC Code guarantees thorough coverage of every aspect of company operations.
