Business Classification

Definition: Business classification refers to the process of categorizing a business based on its primary activities, industry, or structure. This classification helps with tax filing, compliance, statistical reporting, and determining eligibility for grants or funding.

Example: A business that makes and sells handmade candles would be classified under the NAICS code 339999 – All Other Miscellaneous Manufacturing, indicating its primary activity is manufacturing.

Resources:

• NAICS Code Lookup Tool: Find the right classification for your business at NAICS.com.
• Business Structure Guides: Resources like LegalZoom help classify your business as a sole proprietorship, LLC, or corporation.
• IRS Tax Resources: The IRS provides guidance on selecting the correct business classification for tax purposes.

Learn More: Read our NAICS guide to learn more about properly classifying your handmade crafts business.