Should I password-protect documents that are stored in SharePoint/MetaShare?

By default, when you password-protect a document, the entire file including its metadata, is encrypted. When you save your changes to SharePoint, it is seen as a new document and all its metadata values will therefore be emptied.

There are other disadvantages to password-protected documents:

1. You lose co-authoring capabilities
2. You will not be able to open the document in Office on the web.
3. SharePoint’s search engine will not be able to index the content and thereby you will not be able to search for them.

Our recommendation is therefore to not password-protect documents that are stored in SharePoint. Instead you use other methods to restrict access to sensitive documents, see this page: How can I set permissions on documents in SharePoint?.

A Group Policy can be applied so that password-protected documents’ metadata will not be encrypted (the documents’ content will however still be encrypted), so when applied, when you save your password-protected documents back to SharePoint, they will not loose their metadata. Depending on security requirements, this may be an acceptable solution. Details about this Group Policy are described here: Document metadata for password protected files must be protected.