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What does "GmbH" mean in English?

Business, Legal • 
Last updated on 5 April 2024

GmbH, which stands for “Gesellschaft mit beschränkter Haftung,” translates to “Company with Limited Liability” in English. This term refers to a legal form of a company that is commonly used in German-speaking countries, including Germany, Austria, and Switzerland.

What is “GmbH”?

GmbH is a type of business entity in Germany that offers limited liability to its shareholders. This means that the personal assets of the shareholders are protected and cannot be used to cover the company’s debts or liabilities. The GmbH is a popular choice for businesses of various sizes, from small startups to large corporations, due to its flexibility and the protection it offers to its owners.

More information about “GmbH”

The minimum share capital required to establish a GmbH is €25,000, which must be fully paid up before registration. This capital can be contributed in cash or in kind. The GmbH must be registered with the local commercial register, and it is managed by one or more managing directors, who can be shareholders but are not required to be. The GmbH structure is characterized by its legal independence, meaning it can own assets, enter into contracts, and be involved in legal proceedings in its own name.

Here are some additional terms that are related to GmbH:

  • UG (haftungsbeschränkt): A form of GmbH with a lower minimum capital requirement, often referred to as a “mini-GmbH.”
  • AG (Aktiengesellschaft): A public limited company in Germany, similar to a corporation in the US, with a higher minimum capital requirement and shares that can be traded on the stock market.
  • KG (Kommanditgesellschaft): A type of partnership in Germany where at least one partner has unlimited liability (Komplementär), and the other partners have limited liability (Kommanditisten).

Understanding these terms can help new Berliners navigate the business landscape in Germany more effectively.

Sources

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