What is an unlisted public company?
It’s a company not listed on any stock exchange that can sell shares to raise capital for commercial ventures. It’s typically a small company not suitable for listing on an exchange because it doesn’t meet market capitalisation requirements.
Key takeaways
An unlisted public company is not listed on any stock exchange but can sell shares to raise capital, typically a small company not meeting market capitalisation requirements for exchange listing.
Unlike private companies, unlisted public companies have no limit on shareholder numbers, though there's no official market for shares which must be sold back to the firm or to other individuals.
Investment opportunities in unlisted public companies are typically only available to friends, relatives, or close business associates, and in Australia they're not allowed to advertise for investors.
Investing in unlisted public companies carries very high risks but can potentially generate huge returns for those who get in early enough.
Where have you heard about unlisted public companies?
You seldom hear about opportunities to invest in unlisted public companies unless you're a friend or relative of the owner, or closely associated with the business. They're popular in Australia, but they’re not allowed to advertise for investors there.
What you need to know about unlisted public companies.
In contrast to a private company, an unlisted public company doesn't have a limit on the number of shareholders it can have. If you buy shares in an unlisted company, you can sell them back to the firm at a later date or to someone else as there’s no official market for the shares.
Unlisted companies can potentially generate huge returns if you get in early enough, but by the same token the risks are very high.