The paper presents a new approach for taking into account multistate units and common-mode outages in sequential Monte Carlo simulation. Although the state space transition diagrams for multistate units and common-mode outages are well established, they can only be utilised in random or nonsequential simulation; and not in sequential simulation. Using an equivalent or derating-adjusted forced outage rate for generating units instead of a multistate model can lead to pessimistic results. Usually, the common-mode failure rate is small compared with independent failure rates, but such failures may have severe consequences on the system performance. Many utilities are, therefore, now using multistate and common-mode representations for composite System adequacy analysis. The conventional sequential simulation is capable of evaluating composite generation-transmission systems without these failure modes. The effectiveness of the technique is demonstrated using several small examples. Also, the adequacy of the RBTS and the IEEE-RTS is evaluated, and the results are compared with those given by an analytical technique. These again demonstrate the applicability and effectiveness of the approach.