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How do I Configure a SharePoint Document Library for co-authoring?

Configure versioning for co-authoring in SharePoint
 
SharePoint versioning helps protect documents and prevent data loss by allowing authors to roll back to a previous document version when the current version contains unwanted changes.

Do not enable minor versioning in document libraries that contain OneNote notebooks. Minor versioning can result in synchronization errors that prevent edits from being saved.

When multiple authors work on the same document, edits are retained on the server as document versions. To limit server storage usage, you can limit the number of retained versions.

To enable versioning
  1. Browse to the document library that you want to configure.

  2. In the toolbar, on the LIBRARY tab, in the Settings group, choose Library Settings.

  3. In General Settings, choose Versioning settings.

  4. In Document Version History, select Create major versions.

  5. To specify a version retention limit, select Keep the following number of major versions and in the text box, type the number of versions.

 
Configure Require Check Out in SharePoint
 
When a document is checked out of a document library, the document is locked. This makes it unavailable for co-authoring. Therefore, the Require Check Outsetting should not be enabled in document libraries that are used for co-authoring. By default, for SharePoint document libraries, this setting is not enabled.
 
To disable Require Check Out
  1. Browse to the document library that you want to configure.

  2. In the toolbar, on the LIBRARY tab, in the Settings group, choose Library Settings.

  3. In General Settings, choose Versioning settings.

  4. In Require Check Out, select No (default).

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