Teams shared channel vs private channel

Short answer: a private channel limits a conversation to part of one team, and every member must already be in that team. A shared channel can include people who are not in the team, including people outside your organization. Both get their own SharePoint site.

Side by side

Microsoft's channel comparison table, in plain words:

Add people without adding them to the team: private, no. Shared, yes.
Limit membership to a subset of the team: private, yes. Shared, yes.
Share the channel with other teams: private, no. Shared, yes.
Guests can take part: private, yes. Shared, no.
External participants (B2B Direct Connect): private, no. Shared, yes.
Dedicated SharePoint site: private, yes. Shared, yes.
Channel meetings: private, yes. Shared, yes. Microsoft's private channels page says private channels now support channel meetings. Tenants in special cloud environments get this later.
Planner: private, no. Shared, no.
Bots, connectors and messaging extensions: private, no. Shared, no.
Moderation: private, no. Shared, no.
Analytics: private, yes. Shared, no.

Who can see what

Private: Microsoft says "Only members of private channels can see and participate in private channels that they're added to." Anyone, including guests, can be added as long as they are already team members.

Shared: Microsoft says "Other members of the team to which the shared channel is connected can't see the channel." Team owners can see the names of shared channels in their team, but cannot see the files, conversations or member list unless they are members.

Where the files live

Microsoft says each private channel has its own SharePoint site, "to ensure access to private channel files is restricted to only members of the private channel." Shared channels work the same way. For private channels, Microsoft adds that people in the parent team and admins do not have access to the site unless they are also channel members. For both types, Microsoft says site permissions cannot be managed on their own in SharePoint.

Who runs the channel

Private: by default any team owner or team member can create one, and guests cannot. The creator becomes the channel owner. Only the owner can directly add or remove people.
Shared: only team owners can create one. The creator becomes the shared channel owner, and only that owner can directly add or remove people. You can add more than one owner.

What happens when someone leaves

Private: if the owner leaves, Microsoft says a member of the private channel is automatically promoted to owner.
Shared: if the last owner leaves, a member from your organization is promoted. If there is none, "the shared channel remains ownerless" and a Teams admin has to assign an owner. Microsoft advises more than one owner.

Things neither type can do

Neither can be moved to a different team. Microsoft says both "can't be converted" to a standard channel.
Private channels do not support connectors and tabs for Stream, Planner, Tasks by Planner and To Do, and Forms, per Microsoft.

Picking for a small team

These are our advice, not a Microsoft rule:

Need to talk about pay or budget with part of your own team? Use private.
Working with a contractor who has no seat in your team? Use shared, and ask your admin whether sharing outside the company is turned on. Microsoft says you set that by policy, and that both companies must also set up cross-tenant access in Microsoft Entra ID.
Need a guest account to take part? That points to private, since shared channels do not take guests.
Need Planner or bots in the channel? Use a standard channel.

Deleting

Microsoft says a deleted shared channel can be restored within 30 days, and a deleted private channel can also be restored within 30 days.

For where channel files sit, see "Teams channel files missing" and "Teams vs SharePoint".

When to get help

You can build all of this yourself in Microsoft 365. If you would rather have it built and tested for your team, I do that. A tracker like this is a fixed price: $5,000 for one, built in 2 weeks. See "What a SharePoint tracker costs to build". Bring one example of the problem to a free call.

Tell me what's still manual

I am Al Davies. I run 250 High Street LLC and build SharePoint trackers and Power Automate flows for operations teams. I work remotely. The first call is free, and I will not try to sell you anything.

See trackers I built: Tools I built

FAQ

What is the difference between a shared channel and a private channel in Teams?

A private channel is for part of one team. A shared channel can add people who are not in the team, even from outside your organization.

Can guests join a shared channel?

No. Microsoft says guests cannot be added to a shared channel, while guests who are team members can join a private channel.

Where are private channel files stored?

In a separate SharePoint site made for that channel, which only channel members can reach.

Can I turn a private channel into a shared channel?

No. Microsoft says channels cannot be converted from one type to another.

Who can see a private channel in Teams?

Only its members. Team owners who are not members can see it under Manage team but not in the channels list.