what is gmbh 
gmbh is an abbreviation of the german phrase gesellschaft mit beschr nkter haftung which means company with limited liability it s a suffix used after a private limited company s name in germany vs ag for aktiengesellschaft which is used to indicate a public limited company 1 gmbh is the equivalent of llc limited liability company used in the united states or ltd limited used in the united kingdom and is the most common form of incorporation in germany understanding gmbha limited company is one where shareholder liability is limited to the amount of their original investment and the shareholders are not responsible for the company s debts thus protecting their personal assets if 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 are not traded on a public stock exchange the most common corporate legal entity in germany and austria is the limited liability company or gmbh under german law the minimum capital requirement for starting a private limited company is 25 000 euros 25 000 half of which must be available before registering the firm in the unternehmensregister or company register the central platform for saving legally relevant company data 2 this way the country ensures that only solvent entrepreneurs are able to start new companies during the period between the creation and the registration of the company business activities may commence making participating individuals personally liable however the company only becomes effective once it has been registered which usually takes up to three weeks at which point shareholders are protected from any personal liability 3the minimum capital requirement for starting a private limited company is 25 000 euros 25 000 half of which must be available before registering the firm requirements for gmbh