diff --git a/apps/api/v1/pages/api/teams/_post.ts b/apps/api/v1/pages/api/teams/_post.ts
index 32722a4602..4ecc3d3290 100644
--- a/apps/api/v1/pages/api/teams/_post.ts
+++ b/apps/api/v1/pages/api/teams/_post.ts
@@ -69,6 +69,9 @@ import { schemaTeamCreateBodyParams, schemaTeamReadPublic } from "~/lib/validati
  *                ownerId:
  *                  type: number
  *                  description: ID of the team owner - only admins can set this.
+ *                parentId:
+ *                  type: number
+ *                  description: ID of the parent organization.
  *     tags:
  *     - teams
  *     responses:
@@ -99,7 +102,7 @@ async function postHandler(req: NextApiRequest) {
     if (alreadyExist) throw new HttpError({ statusCode: 409, message: "Team slug already exists" });
   }
 
-  // Check if parentId is related to this user
+  // Check if parentId is related to this user and is an organization
   if (data.parentId) {
     const parentTeam = await prisma.team.findFirst({
       where: { id: data.parentId, members: { some: { userId, role: { in: ["OWNER", "ADMIN"] } } } },
@@ -107,7 +110,13 @@ async function postHandler(req: NextApiRequest) {
     if (!parentTeam)
       throw new HttpError({
         statusCode: 401,
-        message: "Unauthorized: Invalid parent id. You can only use parent id of your own teams.",
+        message: "Unauthorized: Invalid parent id. You can only use parent id if you are org owner or admin.",
+      });
+
+    if (parentTeam.parentId)
+      throw new HttpError({
+        statusCode: 400,
+        message: "parentId must be of an organization, not a team.",
       });
   }
 
@@ -119,7 +128,7 @@ async function postHandler(req: NextApiRequest) {
     metadata: data.metadata === null ? {} : data.metadata || undefined,
   };
 
-  if (!IS_TEAM_BILLING_ENABLED) {
+  if (!IS_TEAM_BILLING_ENABLED || data.parentId) {
     const team = await prisma.team.create({
       data: {
         ...cloneData,
@@ -135,7 +144,7 @@ async function postHandler(req: NextApiRequest) {
     return {
       team: schemaTeamReadPublic.parse(team),
       owner: schemaMembershipPublic.parse(team.members[0]),
-      message: `Team created successfully. We also made user with ID=${ownerId} the owner of this team.`,
+      message: `Team created successfully. We also made user with ID=${effectiveUserId} the owner of this team.`,
     };
   }