Already in the Middle Ages "guilds" were formed, which for centuries were among the most important associations of German merchants and craftsmen not only in Livonia. They served the purpose of initiating business and safeguarding interests as well as socialising and charitable purposes. In addition, guilds also established city councils.
Merchants formed the Great Guild in Riga while craftsmen such as carpenters and butchers, who were organised in artisanal guilds, belonged to the Small Guild. Membership was obligatory for every master who practised a guild trade. Riga, Reval (today Tallinn) and Dorpat (today Tartu) also included the Blackhead chapters, an association of unmarried merchants involved in foreign trade. Their tasks also included defending the city or organising festivals.
At the end of the 19th century, with the freedom of trade in the Baltic provinces, the guilds, which had become rigid in their traditions, lost their importance because free competition was now also available to Estonians and Latvians, by then excluded from the guilds.