When in a guild hall, allows a player to join that guild, thus making it the player's primary guild. You must have advanced in the guild at least one level, and the guild you are joining must be (one of) your highest-level guild.
All players are forced to select a primary guild before they can advance to level 4, but you really should pick one at level 1, otherwise you are paying secondary experience to advance, while primary experience is half as much.
NOTE: With only one exception, it is impossible to change primary guilds! (The exception is the Jedi Master quest.)