The kabunakama were entrusted by the shogunate to manage their respective trades, and were allowed to enjoy a monopoly in their given field.
Though the shogunate originally opposed monopolies, they eventually gave in to the increasing numbers and organization of merchants' associations, and decided to make an attempt to control them by officially licensing them.
In 1721, the government began to authorize individual nakama to become kabunakama (kabu refers to "shares", though these were themselves not tradeable), and to oversee the organization and trade within given fields.
The structure was originally created to replace older guilds, known as za, and by 1785, there were over one hundred kabunakama in Osaka alone, including a number granted special privileges by the shogunate, but taxed heavily in exchange.
In the 1840s, rōjū Mizuno Tadakuni attempted to do away with the kabunakama, in order to combat monopolies, but this and many of his other reforms were resisted so strongly by the merchants of Osaka (and others) that he was forced to abandon his efforts.