diff --git a/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModel.kt b/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModel.kt
index 998f6f63d0..aaab78ff46 100644
--- a/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModel.kt
+++ b/app/src/main/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModel.kt
@@ -960,11 +960,12 @@ class VaultAddEditViewModel @Inject constructor(
     ) {
         updateCommonContent { currentCommonContentState ->
             currentCommonContentState.copy(
+                selectedOwnerId = currentCommonContentState.selectedOwner?.id,
                 availableOwners = currentCommonContentState
                     .availableOwners
                     .toUpdatedOwners(
                         selectedCollectionId = action.collection.id,
-                        selectedOwnerId = currentCommonContentState.selectedOwnerId,
+                        selectedOwnerId = currentCommonContentState.selectedOwner?.id,
                     ),
             )
         }
diff --git a/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModelTest.kt b/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModelTest.kt
index 04b26aab1d..55399b6ea6 100644
--- a/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModelTest.kt
+++ b/app/src/test/java/com/x8bit/bitwarden/ui/vault/feature/addedit/VaultAddEditViewModelTest.kt
@@ -4056,6 +4056,58 @@ class VaultAddEditViewModelTest : BaseViewModelTest() {
             assertEquals(expectedState, viewModel.stateFlow.value)
         }
 
+        @Suppress("MaxLineLength")
+        @Test
+        fun `CollectionSelect should update selectedOwnerId when isIndividualVaultDisabled is true`() =
+            runTest {
+                every {
+                    policyManager.getActivePolicies(type = PolicyTypeJson.PERSONAL_OWNERSHIP)
+                } returns listOf(
+                    SyncResponseJson.Policy(
+                        organizationId = "Test Org",
+                        id = "testId",
+                        type = PolicyTypeJson.PERSONAL_OWNERSHIP,
+                        isEnabled = true,
+                        data = null,
+                    ),
+                )
+
+                val vaultAddEditType = VaultAddEditType.AddItem
+                val vaultItemCipherType = VaultItemCipherType.LOGIN
+                mutableVaultDataFlow.value = DataState.Loaded(
+                    data = createVaultData(),
+                )
+
+                val viewModel = createAddVaultItemViewModel(
+                    savedStateHandle = createSavedStateHandleWithState(
+                        state = null,
+                        vaultAddEditType = vaultAddEditType,
+                        vaultItemCipherType = vaultItemCipherType,
+                    ),
+                )
+
+                val action = collectionSelectAction()
+                viewModel.trySendAction(action)
+
+                val expectedState = vaultAddItemInitialState.copy(
+                    viewState = VaultAddEditState.ViewState.Content(
+                        common = createCommonContentViewState(
+                            availableOwners = listOf(
+                                VaultAddEditState.Owner(
+                                    id = "organizationId",
+                                    name = "organizationName",
+                                    collections = emptyList(),
+                                ),
+                            ),
+                            selectedOwnerId = "organizationId",
+                        ),
+                        isIndividualVaultDisabled = true,
+                        type = createLoginTypeContentViewState(),
+                    ),
+                )
+                assertEquals(expectedState, viewModel.stateFlow.value)
+            }
+
         @Suppress("MaxLineLength")
         @Test
         fun `UserVerificationLockout should set isUserVerified to false and display Fido2ErrorDialog`() {