Definition of Line of Business
It isn't always easy to say what line of business we're in. Many businesses operate in more than one field. What's more, businesses are categorized in many ways by different authorities. Several authorities have developed classification systems.
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Standard Industry Classification System
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The Standard Industry Classification system organizes businesses by codes. There are 10 major groupings of industries, coded A through J. Within these groups, industries are classified into 99 major groups. These are divided into industry groups with three-digit numbers, which in turn may be divided into groups numbered with four digits.
North American Industry Classification System (NAICS)
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The North American Industry Classification System was developed by the federal government, jointly with Canadian and Mexican agencies. It has five or six levels of classification. The major categories are numbered 11 through 99, with many omissions. Deeper levels have successively more digits. Classes down to the fourth level, which has five digits, apply internationally. Six-digit categories are country-specific.
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Global Industry Classification Standard
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The Global Industry Classification Standard was developed by Standard and Poor's. It groups businesses into 10 sectors. Within these, there are 24 industry groups, 68 industries and 154 sub-industries.
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