The classification system used to categorize business establishments is based on the North American Industry Classification System. This system assigns a six-digit numerical code to businesses based on their primary economic activity. For example, a business primarily engaged in selling clothing online might be assigned a specific code reflecting that activity.
Using this standardized classification is essential for various purposes, including statistical analysis, economic planning, and governmental regulation. It allows for accurate tracking of industry trends, facilitates comparisons between different sectors, and helps governments understand the economic landscape. Furthermore, businesses may require this code for tax filings, loan applications, and other administrative procedures.