1. The rapid increase of trade in the medieval European cities, the formation of specific occupational sectors, the necessity to withstand the excessive taxation and exploitation and the sense of organization were the factors which led to the formation of the guilds.
2. The aims of the guilds were to foster mutual help and co-operation, to maintain the monopoly of the markets and the attainment of economic stability.
3. The guilds were the associations of experts in different occupational sectors. There were two kinds of guilds:
(i) The merchant guilds
(ii) The craft guilds
The merchant guilds were the first to emerge. Inter-city leagues were formed linking the cities for the progress of trade.
The Hanseatic League is an example for this, which regulated the trade activities of many cities of Europe.
The craft guilds were the associations of different artisans and craftsmen of the medieval period. Every occupational group like the leather workers, carpenters, blacksmiths, etc. had separate guilds.