DEFINITION of 'GmbH'

GmbH is an abbreviation of the German phrase Gesellschaft mit beschränkter Haftung, which means "company with limited liability." It's a suffix used after a private limited company's name in Germany (versus AG, which is used to indicate a public limited company). GmbH is an equivalent of an English Ltd., and is the most common form of incorporation in Germany.

BREAKING DOWN 'GmbH'

A limited company is one where the shareholders' liability is limited to the amount of their original investment, and the shareholders are not responsible for the company's debts, protecting their personal assets in the event that the company becomes insolvent. The difference between a private limited company and a public limited company is that the shares in a private limited company are not offered to the general public and not traded on a public stock exchange. (For more, see: What is the full phrase for 'GmbH', and what do the words in this acronym mean in English?.)

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