How to limit directory access sftp?

[ductiletoaster]

When i connect using sftp from fillzilla i am able to see all folders and files under the server side filsystem. How do i limit this to just a specific folder. Also how can i add another user so they can also read and write to this same folder

to summerize what i want to do.... me and a friend want to be able to access a shared folder from each others computer.