Before setting up your property business, whether you operate buy to lets, invest in property or manage properties as a letting agent on behalf of landlords, you will need to incorporate your property management business. During the company incorporation process on Companies House, you will need to provide your company’s SIC code based on the nature of your business activities and services. There are over 600 SIC codes to choose from and multiple ones for property which can be overwhelming if your expertise is in property management as opposed to company formations. This article explains what a SIC code is and how to choose the appropriate SIC code for your new property management company.
What are standard industrial classifications (SIC codes)?
A Standard industrial classification code (SIC code) is a five-digit code which describes a company’s economic activities and business services. These codes help the Office for National Statistics (ONS) track the state and growth of UK companies. The condensed SIC code list maintained by Companies House is available on the gov.uk website. A limited company can have multiple SIC codes. Dormant companies and non-trading companies are also required to have a SIC code.
Real estate businesses can have multiple SIC codes depending on the nature of their property activities. SIC codes can also be updated via a confirmation statement if ever your property company's business activities evolve.
What is the SIC code for Letting and operating your own or leased real estate?
If you let properties you own (e.g. buy to lets) then your activities will fall under SIC code 68209: Letting and operating of own or leased real estate (other than Housing Association real estate and conference and exhibition services). The properties can be furnished or unfurnished homes, apartments, non-residential buildings exclusion conference and exhibition centres, as well as residential mobile homes. Short-stay and other non-residential accommodation such as hotels, suite hotels, holiday homes, rooming houses, campgrounds, trailer parks are not included under this SIC code.
What is the SIC code for Renting and operating Housing Association real estate?
Housing associations provide social housing, shared ownership homes as well as some market homes to rent and buy. Housing associations aim to support those who are vulnerable, on low income and key workers such as nurses. Housing associations fall under the SIC code 68201 and can also invest in initiatives which support local communities.
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What is the SIC code for real estate agencies?
If your property company is sourcing properties or providing intermediation services in buying, selling and renting of real estate on a fee or contract basis, advisory activities and appraisal services in connection with buying, selling and renting of real estate, on a fee or contract basis or real estate escrow agent activities then the relevant SIC code for your activities will be 68310.
What is the SIC code for property management companies?
If your property company is managing properties on behalf of a landlord (e.g. full management letting agent) then the right classification of your property management business activities is management of real estate on a fee or contract basis (SIC code 68320).
What is the SIC code for property investment companies?
If you are a property investor and your property company is buying and selling property including residential homes and apartments as well as non-residential buildings, including exhibition halls, self-storage facilities, malls and shopping centres then the SIC code for your business activities will be 68100 Buying and selling of own real estate.
Once you have chosen a SIC code for your property company and finalised the incorporation process, you will need to generate a residential lettings terms of business agreement to onboard new landlords and tenancy agreements to rent out properties to tenants. Creating lawyer-approved agreements can be costly and it can be tempting to download free templates online. However, this process is risky and unnecessary thanks to contract management platforms like Legislate. Legislate allows to tailor the essential agreements to grow your property business such as letting agent terms of business, tenancy and employment agreements. To create a lawyer-approved contract for only £9.95, sign up to Legislate today!