---
title: "How to Create a Folder in SharePoint in 2026"
lang: en
canonical_url: https://www.papermark.com/blog/how-to-create-folder-in-sharepoint
last_updated: 2026-07-21
published: 2025-04-08
category: [datarooms]
author: "Marc Seitz"
summary: "Learn how to create and manage folders in SharePoint effectively, including best practices and why businesses are choosing specialized data room solutions like Papermark for better document organization"
---

# How to Create a Folder in SharePoint in 2026

SharePoint is a popular document management platform, but creating and managing folders effectively requires understanding its features and limitations.

This guide will walk you through the process while highlighting why many businesses choose specialized solutions like Papermark for their document organization needs.

## How to create a document library in SharePoint

To create a new document library in SharePoint:

1. Go to your SharePoint team site
2. Click "New" in the menu bar
3. Select "Document library"
4. Enter a name and description for your library
5. Click "Create"

![SharePoint document library creation](https://img.papermarkassets.com/upload/file_W441x4Nuzp8PCpHFt9XetT-Screenshot-2025-04-08-at-16.22.21.png)

Note: Only site owners can create new document libraries. Each site collection is limited to 2,000 lists and libraries combined.

## How to create a folder in SharePoint

### Method 1: Using the "New" button
1. Navigate to your SharePoint site and the library where you want to create the folder
2. Click the "New" button at the top of the page
3. Select "Folder" from the dropdown menu
4. Enter a name for your folder
5. Click "Create"

![SharePoint folder creation interface](https://img.papermarkassets.com/upload/file_QCSBxacsPaTtpUHeLVTNcZ-Screenshot-2025-04-08-at-16.22.37.png)

### Method 2: Using drag and drop
1. Navigate to your SharePoint library
2. Drag a folder from your computer
3. Drop it into the SharePoint interface
4. The folder and its contents will be uploaded automatically

![SharePoint drag and drop interface](https://img.papermarkassets.com/upload/file_C3b7zTMsUSByBp1ouPwGFi-Screenshot-2025-04-08-at-16.22.45.png)

## SharePoint folder limitations

While SharePoint offers basic folder creation capabilities, it has several limitations:

- Limited folder nesting (typically 8 levels deep)
- Basic organization features
- No real-time analytics
- Complex permission management
- Limited customization options
- No built-in activity tracking
- Basic metadata support
- Limited folder templates
- No dynamic watermark feature

## Why businesses choose Papermark for folder organization

Papermark offers specialized features that address these limitations:

### Real-time analytics
With Papermark's real-time analytics, you can track how users interact with your folders and documents, monitor access patterns, and get detailed engagement metrics. This comprehensive tracking helps you understand how your content is being used and by whom.

![Papermark analytics dashboard](https://img.papermarkassets.com/upload/file_YVZLbYwELYa8SxfjBg3mGe-virtual-data-room-analytics-.png)

### Enhanced organization
Papermark provides advanced folder organization features including:
- Unlimited folder nesting
- Custom folder templates
- Rich metadata support
- Smart folder organization
- Drag-and-drop interface
- Bulk operations

![Papermark folder organization](https://img.papermarkassets.com/upload/file_AEQU5o1Y1YJgwEk6VDUS2w-Screenshot-2025-03-28-at-14.50.06.png)

### Granular permissions
Papermark enables you to set detailed permissions at both folder and document levels, ensuring your content remains secure and accessible only to authorized users.

![Papermark granular permissions](https://img.papermarkassets.com/upload/file_LkU4BNY6MKUKMgDucSzzFg-papermark-granular-permissions.png)

## How to organize documents with Papermark

### Creating folders in Papermark
1. Sign up for a [Papermark account](https://www.papermark.com/login)
2. Click "New Folder"
3. Name your folder
4. Set folder permissions (optional)
5. Add metadata (optional)

![Papermark data room interface](https://img.papermarkassets.com/upload/file_35DtVER7SdS1G6unRE8unv-papermark-data-room.png)

### Advanced folder features
- Create folder templates
- Set folder-level permissions
- Add custom metadata
- Enable activity tracking
- Configure sharing settings
- Add [dynamic watermarks](https://www.papermark.com/dynamic-watermarking.md)

![Papermark advanced folder features](https://img.papermarkassets.com/upload/file_XpamYyK3cmNEd2rc3bsVeN-Screenshot-2025-03-24-at-13.56.32.png)

## Feature comparison

| Feature | SharePoint | Papermark |
| --- | --- | --- |
| Folder nesting | 8 levels | Unlimited |
| Real-time analytics | Limited |  |
| Activity tracking | Basic |  |
| Custom metadata | Basic |  |
| Folder templates | ✗ |  |
| Granular permissions | Basic |  |
| Drag and drop | Basic |  |
| Bulk operations | Limited |  |
| Custom branding | Enterprise only |  |
| API access | Enterprise only |  |

## Getting started with Papermark

Ready to experience better folder organization? Papermark offers a free plan with comprehensive features:

1. [Sign up for Papermark](https://www.papermark.com/login)
2. Create your first folder
3. Upload your documents
4. Organize with advanced features

## Conclusion

While SharePoint provides basic folder creation capabilities, Papermark offers specialized features designed for efficient document organization. With advanced analytics, enhanced security, and dedicated folder management support, Papermark is the preferred choice for businesses looking to organize their documents professionally and securely.

Ready to improve your document organization? [Try Papermark today](https://www.papermark.com/login) and discover how it can transform your document management workflow.

## FAQ

### How do I create a folder in SharePoint?

Open the document library, click New at the top of the page, choose Folder, enter a name, and click Create. You can also drag a folder from your computer straight into the library to upload it with its contents. SharePoint limits folder nesting to about 8 levels.

### How do I create a document library in SharePoint?

Go to your team site, click New, select Document library, add a name and description, and click Create. Only site owners can create libraries, and each site collection is capped at 2,000 lists and libraries combined, so plan your structure before you hit the limit.

### How do I create a SharePoint folder to share with external users?

You create the folder normally, then manage sharing through SharePoint's permission settings, which can be complex to configure per external user. If external sharing with tracking is the goal, Papermark is simpler: you send a secure link with a password and see exactly who opened each file, starting free ($0).

### How many folder levels can SharePoint nest?

SharePoint typically supports around 8 levels of folder nesting, which can be restrictive for deep document structures. Papermark supports unlimited folder nesting plus folder templates and rich metadata, which is why teams with complex data rooms often switch.

### Can I track who accesses a SharePoint folder?

SharePoint offers only basic activity tracking and no real-time engagement analytics on folders. Papermark records who viewed each document, which pages they read, and how long they spent, in real time, on the free plan, giving you visibility SharePoint does not.

### What is a good alternative to SharePoint folders for secure sharing?

Papermark is a popular alternative for organizing and sharing documents securely. It adds unlimited nesting, granular folder and document permissions, dynamic watermarking, and page-by-page analytics on a free plan, with data rooms at €99/month, versus SharePoint's enterprise-only branding and API access.

---

_Markdown version of [this article](https://www.papermark.com/blog/how-to-create-folder-in-sharepoint) for AI agents and LLMs._
_More Papermark content: [llms.txt](https://www.papermark.com/llms.txt) · [full index](https://www.papermark.com/llms-full.txt)._