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One of the requirements of EIS is that the company seeking investment must be engaged in a qualifying business activity (see E3.141).

Straightforward, ordinary wholesale or retail trades should have no difficulty in being qualifying trades for EIS purposes. The legislation starts by defining what is an acceptable trade of wholesale and retail distribution and then sets out criteria for deciding whether a trade is ordinary.

A trade of wholesale distribution is one in which the goods are offered for sale and sold to persons for resale by them, or for processing and resale by them, to members of the general public for their use or consumption¹. Goods can include virtually any tangible asset other than those mentioned elsewhere in the list of excluded activities (see E3.142). It may be that only a small and specialised group of the general public may be interested in using or consuming the wholesale goods². However wholesalers who sell to other wholesalers would not be carrying on a trade of wholesale