Hi @Vinod Survase ,
To limit or block external sharing in SharePoint Online for SPO sites level and global SPO settings for each individual user level, you can adjust the sharing settings in the SharePoint Admin Center. To access the Sharing settings (tenant level), navigate to the SharePoint Admin Center, under Policies, select Sharing. From there, you can specify the level of sharing you want to allow. Based on your needs, if you still want to share externally, it is recommended that you select "New and existing guests" so that the shared guests need to be verified before they can see the file. Moreover, in the More external sharing settings section below, you can impose stricter restrictions, such as restricting domain and restricting sharing persons. You can complete tenant-level sharing settings here.
To access the Sharing settings (site level), still in the SharePoint Admin Center, under Sites, select Active sites. Then select the site you want to set, and then click sharing above to enter the Sharing settings interface. It is recommended to keep the same settings as the tenant level.
And, to limit SharePoint site sharing to site owners only, you can enter the site, click the gear in the upper right corner, select Site permissions, and enter the following interface:
Click Change how members can share, then enter the following interface:
select "Site owners and members, and people with Edit permissions can share files and folders, but only site owners can share the site" under Sharing settings in the Site Permissions section. Additionally, you can prevent users who aren't members of the site from requesting access by turning off access requests.
To implement all the security best practices for SharePoint Online tenant, you should also consider adjusting the default sharing settings to better protect your business, as well as breaking permission inheritance to share only specific libraries or documents with users. It is also recommended to use SharePoint groups and Active Directory groups to assign permissions to sites, as well as to store confidential information in a site that has external sharing turned off.
For more information, please refer to:
Managing SharePoint Online Security: A Team Effort - Tenant settings
Limit sharing in Microsoft 365 - SharePoint site
Manage access to files and sites
Share SharePoint files or folders
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