The directory object quota limit for the Principal has been exceeded

You may receive an error "The directory object quota limit for the Principal has been exceeded", when using a service account for Group creation (Office 365 Groups and Microsoft Teams).

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This issue occurs when the service account used for group creation has created 250 directory objects in Azure Active Directory.  This is a known limitation published by Microsoft and currently there is no method to increase this limit.

If you do receive this error, the following options are available

  • Change to another service account for Group creation
  • Change to using app permissions for Group creation
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