Listed below are steps to be followed for creating a new user in Office 365. Login to Office 365 as a Admin user and click on the Admin link. Then navigate to Admin Overview and click on the Add new users link available under Admin shortcuts.
In the New User screen enter the required details such First name, Last name, Display name and User name. If you want you can fill in the additional details for the user as well by expanding the additional fields section.
In the Settings screen, select the required permission and the user location.
In Assign licenses screen, select the services that needs to be made available for the new user.
If you want to receive the new user creation details in email, then mark the check box with label as Send email and enter your preferred email address.
The Results screen would display the user name and the temporary password for the new user.