Unquoted shares are also called as unquoted equities and these shares of a private limited company, which are not traded on a recognised stock exchange. It is kitty of unquoted public company. A company with previously issued securities that are no longer quoted or traded on formal exchanges such as NYSE. Shares in these companies are available in the over-the counter (OTC) market, but they trade in very low volumes, if at all.
One reason of such companies is the fact that a private firm cannot have more than 50 shareholders. By remaining unquoted, the firm’s owners can operate the business in a similar nature to a private company, avoiding federal and exchange regulations. Unquoted public companies can also result from a company being delisted. Because the shares of these companies are not quoted and are rarely traded, they are often illiquid and difficult to price. Usually analysts will value unquoted shares by using comparables or price multiples.
There are number of areas where purchases of unquoted shares could involve the pension scheme member or sponsoring employer and the pension fund in substantial tax charges. For example, unquoted equities may be an indirect investment in taxable property, which is not allowed.