What is an Unquoted Public Company
An unquoted public company, also known as an unlisted public company, is a firm which has issued shares that are no longer traded on a stock exchange.
BREAKING DOWN Unquoted Public Company
A public company might be unquoted because it is too small to qualify for a stock market listing, has too few shareholders for a listing or has delisted. It might also want to avoid ownership disclosure requirements under certain listing regimes.
To be listed on an exchange such as the New York Stock Exchange, companies must exceed an annual income or market capitalization threshold. They must issue a specific number of shares and be able to afford the exchange listing fee.
By remaining unquoted, the firm's owners can operate the business more like a private company and avoid exchange regulations. But while unquoted public companies are less heavily regulated than listed public companies, they are more regulated than private ones. As public companies, they still have to comply with financial reporting requirements, and may be subject to the same takeover codes as listed companies. Unquoted public companies may also be banned from marketing themselves to investors.
As unlisted securities, shares in unquoted public companies are bought and sold in over-the-counter markets. Because they are rarely traded and often illiquid, they are difficult to price. Unquoted public companies are valued using comparables such as price-earnings ratios.