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I have opened a modern team SharePoint for my department. The SharePoint is required to be public to everyone of the company except for one specific folder that needs to be accessed for view and edit only by a small team. The problem is that I cannot find a way how to make this folder private from the public and available to the team.

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Based on your description, I understand that you want to set a unique permission for a folder.

Please refer following articles to achieve this.

SharePoint: Unique Permissions

How to give unique permission to a folder in SharePoint Online document library

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