Sunday, November 24, 2013

What does GmbH mean?


Gesellschaft mit beschränkter Haftung (abbreviated GmbH, in Austria also GesmbH or Ges.m.b.H.), German for "company with limited liability", is a type of legal entity very common in Germany, Austria, Switzerland, and other German-speaking Central European countries. The name of the GmbH form emphasizes the fact that the owners (Gesellschafter, also known as members) of the entity are not personally liable for the company's debts.

The GmbH has become the most common corporation form in Germany, since the AG (Aktiengesellschaft), the other major company form corresponding to a stock corporation, was until recently much more complicated to form and operate. In Germany, there are two types of companies: publicly traded and privately held.


The acronym 'GmbH', which is written after the name of the company, designates a company as private in Germany. The letters stand for Gesellschaft mit beschränkter Haftung which, translated literally, means a 'company with limited liability'. GmbH companies are incorporated and, as such, are legal entities unto themselves. These companies must have a minimum of two partners and may be, but do not have to be, owned by a public company.


German companies that are publicly traded are designated as such by the letters 'AG' after the company name. 'AG' is an abbreviation for the German word Aktiengesellschaft, which literally translates to 'corporation' in English.

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