Аrticles 16/06/2021 12/08/2021

KVEDs: Why More Does Not Mean Better

The Classifier of Types of Economic Activity (KVED/NACE) is chosen when registering a company or an individual entrepreneur and provides an opportunity to do a specific type of business. KVED as an "identifier" of the activity of a company provides a lot of information for analysis and helps in business intelligence. In this article we will tell what "general" types of activity mean and whether it is normal when there are too many types of activity.

How Many KVED Codes Does a Reliable Counterparty Have?

Formally, the number of codes is not limited, but in practice it is customary to specify from 1 to 6 for one business entity. However some companies try to cover as many areas as possible and to register as many KVED codes as possible. Sometimes this does not indicate diligence but the unscrupulousness of the company.

As an illustration of this situation, imagine an organisation whose main type of activity is the manufacture of bread and at the same time it offers services for the sale of securities.

And such enterprises exist. For example, LLC "Universal Logistics Solutions" is so universal that it can work according to 160 KVEDs. The company simultaneously provides services for translation, flower delivery, rental of housing, car repair, and it also sells goods: from computers and medical equipment to clothing and food.

A long list of types of activity may indicate that:

• the activity of a counterparty is not aimed at achieving real business results;

• this is one of signs of fictitiousness;

• some companies register many KVED codes to cover up unscrupulous activity.

What to do? When facing such a company or individual entrepreneur, it is desirable to find out why the company is so "scattered". Cooperation with such a counterparty may lead to negative financial consequences. If the company turns out to be fictitious, there is no guarantee that it will fulfill its obligations to you.

KVEDs of a "General" Nature

Sometimes a company does not have too many KVED codes, but they are not specific. These are the so-called "general" types of activity. Their wording allows to cover many areas. For example:

• wholesale of a various range of goods without certain specialisation (KVED 46.90);

• market research to determine public opinion (KVED 73.20);

• business and other management consultancy activities (KVED 70.22);

• other professional, scientific and technical activities (KVED 74.90).

If the main type of activity of a company is general, it may also indicate that the activity of the counterparty is not aimed at achieving real business results and has signs of fictitiousness. Therefore, the nature and number of types of activity need to be paid attention to and analysed before starting cooperation with a counterparty.

How to Learn about All Types of Activity of a Company

Data on registered types of activity are shown in the Profile of a counterparty in the YouControl system. If there are too many KVEDs, this will be shown by the Express Analysis in the first place.

If the main KVED of a company is of a general nature, the Express Analysis will also indicate this factor.

The full list of registered types of activity of a counterparty can be seen in its profile, in the tab "Profile overview":

Start checking right now!

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