I don't want 100 different SharePoint sites. How to create private teams w/o a new site?

Every M365 Group (and every Team) auto-creates a SharePoint site. You cant avoid it. What you CAN do going forward: use private channels inside a single Team instead of creating new Teams for every project. Private channels get their own mini SharePoint site but at least your main structure stays cleaner. For the existing mess, you can archive unused Teams through the admin center which hides the associated sites from active views.

Funny, most of my users, who create Teams, don't even realize there's a SharePoint site in the background as they do all their interactions via Teams.

Are you sure you are trying to fix an issue that your users actually have, or are you trying to organize it for your own purposes? Form a small group of company users and ask them how they best work and don't load it with IT people.

There is no supported way to create a Microsoft Team without creating a SharePoint site.

There is also no supported way to create a Private Channel without creating a separate SharePoint site.

There is also no supported way to have “multiple private areas” inside a single SharePoint site that map to Teams channels.

This is the product architecture.

If each group/project doesn’t need its own Planner, Notebook, mailbox, or private channel, then 

1. Create ONE Team
This becomes the “container” for everyone.
(e.g., “Operations” or “Projects”)

2. Inside that Team, Create all standard channels 
Each channel = one project.

3. In SharePoint, go to the “Documents” library
Each standard channel = a folder. Teams will automatically create one folder per channel in the SharePoint “Documents” library.

4. In the backend SharePoint site, create MORE structure if needed

You can create:

• Multiple document libraries (one per group/project)
• OR Folders with broken inheritance

Each one can have its own permissions.

5. Break permission inheritance on each channel folder, assign custom permission
For each library/folder:

• Remove inherited permissions
• Add the correct SharePoint groups
• Give each group the right access (Read / Edit / Contribute)

This gives each project a private document space without creating new SharePoint sites.

6. Add each document library to Teams navigation

You can surface these libraries inside Teams using:

• Tabs in any channel
• SharePoint links in the left navigation
• Pinned links in the Team
• In Teams > Shared > Add Document Library to add link of any document library

Note: 
Files stored in the secured folder
Chat stays in the channel (not private)
Tabs can point to project-specific pages/lists

This option gives each group a clean, private document space without creating new SharePoint sites. This is the closest thing to “private channels without new sites” that Microsoft allows.

This method does NOT give you:

• Private channel chat
• Private channel membership
• Private channel Planner
• Private channel OneNote

If you don't need all the extras associated with creating a Teams channel, then why not just create a group chat, rename it based on the project type or name, so it's organized in each person's chat list and then go from there. You can still file share and collaborate within the chat without getting weighed down by all the extra stuff that goes along with SharePoint. 

This reserves SharePoint for dedicated, long-term groups or programs that would benefit from document libraries, Teams channel, Pages, etc. 

You’re not crazy, and you’re not “doing SharePoint wrong”. What you’ve run into is the intentional design of modern SharePoint + Teams, colliding with how humans intuitively expect structure to work.

The hard truth (why this keeps happening)

Modern SharePoint uses a flat site architecture. Every SharePoint “site” you see in the admin center is a top‑level site collection, not a subsite or page. Microsoft intentionally killed hierarchical subsites because they caused massive problems with permissions, governance, and migrations. This is documented and by design.

From that single decision flows everything else:

• Creating a Team creates:
  • a Microsoft 365 Group
  • a new SharePoint site collection for files
• A standard channel = folder in that site
• A private or shared channel = another SharePoint site, because Microsoft enforces one rule:

Any security boundary == its own SharePoint site

This isn’t accidental, and there is no supported way to have true privacy in Teams without creating another SharePoint site. Microsoft is very explicit about this in their documentation. Private channels should be used sparingly for this exact reason.

Why Hub Sites exist (and what they actually are)

A Hub Site is not a parent site.

It does not contain other sites. It does not control permissions. It does not create hierarchy.

A hub site is a navigation, branding, search, and content aggregation layer that connects independent site collections into something users experience as a single logical space.

Hubs exist because SharePoint is flat. They are the modern replacement for the illusion of structure that subsites used to provide.

A structure that actually works (and is explainable)

If your goal is:

• minimal site sprawl
• human‑understandable structure
• privacy without chaos

Then this is the least bad model that consistently works in real organizations:

1. One Communication Site = the “company front door”

• Intranet / org home
• Policies, announcements, reference content
• No Teams, no projects, no collaboration
• Declare this site as a Hub Site

This gives you org‑wide navigation, branding, and search across everything associated with it.

2. Limit Teams to real, long‑lived teams

• Departments
• Stable product teams
• Long‑running programs

Not:

• Short projects
• “Phase 2 – Test – Copy”
• Temporary initiatives

Every Team creates a SharePoint site — so Teams creation must be governed, even if lightly.

3. Avoid private channels unless legally required

Private (and shared) channels will always create new SharePoint sites. There is no workaround.

If what you need is:

• management-only folders
• sensitive documents
• limited visibility

Use instead:

• separate document libraries
• broken permission inheritance
• or a standalone SharePoint site not connected to Teams

Yes, breaking inheritance is ugly — but it is visible, auditable, and does not create invisible sites that confuse everyone.

Microsoft themselves caution against overusing private channels for exactly this reason.

The mental model that actually clicks

This is how it finally makes sense to technical people:

SharePoint sites are not “websites”.
They are security and lifecycle containers that happen to have web pages.

Once you accept that, the rest becomes survivable.

Final reality check

You cannot have:

• one SharePoint site
• true security isolation
• Teams-style collaboration
• and zero additional sites

at the same time.

Hub Sites are Microsoft’s answer to this trade‑off: accept many sites, but present them as a single, coherent experience.

It’s not elegant. But with governance and restraint, it is understandable — and that’s the real optimization target.

You cannot create a private channel in a Team without it having an associated SharePoint site. This is because that is where documents for that private channel are stored so they can only be accessed by people in the team who members of that private channel.

For your SharePoint architecture, one thing you should consider is to have 1 hub site for the overall organization and then multiple associated sites for different departments, projects etc. The branding, color schemes etc cascade down to the associated sites.

Rob
Los Gallardos
Microsoft Power Platform Community Super User.
Principal Consultant, Power Platform, WSP Global (and classic 1967 Morris Traveller driver)