How Many NAICS Codes Can A Company Have?

In order to understand how many NAICS codes a company can have, it is important to first understand what NAICS codes are. NAICS, which stands for North American Industry Classification System, is a system used by various government agencies to classify businesses based on their primary economic activity. These codes are used for statistical purposes, such as collecting data on industries and analyzing economic trends.

According to the official guidelines, an establishment may only have one primary NAICS code. This primary code is determined by the industry that generates the highest revenue or value of shipments for the company. It represents the main line of business for the establishment.

Secondary NAICS Code Definition

It is important to note that an establishment can also have additional secondary NAICS codes if it operates in more than one activity. These secondary codes represent other revenue-producing activities that the company engages in, but are not the primary focus of its business. It is common for companies to have secondary codes if they have diversified their operations or have multiple lines of business.

Example: Consider a hospital that also operates a parking garage on its premises. While the primary activity of the hospital is providing healthcare services, the parking garage is a secondary revenue-producing activity. In this case, the hospital would need to choose its primary NAICS code based on its principal business activity of being a hospital. However, it should also choose a secondary NAICS code for parking lots and garages to accurately represent its secondary line of business.

It is worth mentioning that some companies generate significant revenues in their secondary lines of business. Therefore, it is crucial for companies to carefully consider their secondary activities and select the appropriate NAICS codes to accurately reflect their operations.