diff --git a/TestingHelperTest/public/New-ModuleV3-Add-ModuleV3.Tests.ps1 b/TestingHelperTest/public/New-ModuleV3-Add-ModuleV3.Tests.ps1
index bd87b8b..a29c865 100644
--- a/TestingHelperTest/public/New-ModuleV3-Add-ModuleV3.Tests.ps1
+++ b/TestingHelperTest/public/New-ModuleV3-Add-ModuleV3.Tests.ps1
@@ -37,6 +37,30 @@ function TestingHelperTest_NewModuleV3_AddModule_FailCall_NewModuleManifest {
 
 }
 
+function TestingHelperTest_NewModuleV3_AddModule_FolderExists {
+
+    $moduleName = "MyModule"
+
+    New-TestingFolder -Name $moduleName
+
+    $result = Add-TT_ModuleV3 -Name $moduleName
+
+    Assert-AddModuleV3  -Path $result
+}
+
+
+function TestingHelperTest_NewModuleV3_AddModule_ModuleExistInFolder {
+
+    $moduleName = "MyModule"
+
+    $result = Add-TT_ModuleV3 -Name $moduleName
+
+    $result = Add-TT_ModuleV3 -Name $moduleName @ErrorParameters
+
+    Assert-IsNull -Object $result
+    Assert-Contains -Expected "Module already exists." -Presented ($errorVar.Exception.Message)
+}
+
 function TestingHelperTest_NewModuleV3_AddModule_DefaultManifest {
 
     $moduleName = "MyModule"
diff --git a/private/New-ModuleV3.Helper.ps1 b/private/New-ModuleV3.Helper.ps1
index ed46f05..679ce15 100644
--- a/private/New-ModuleV3.Helper.ps1
+++ b/private/New-ModuleV3.Helper.ps1
@@ -61,7 +61,7 @@ function Get-TestModuleName {
     return $name
 } 
 
-function New-Folder{
+function New-ModuleFolder{
     [CmdletBinding(SupportsShouldProcess)]
     param(
         [Parameter(Mandatory,ValueFromPipeline)][string]$Path
@@ -71,23 +71,28 @@ function New-Folder{
 
         try {
             #test if path exists
-            if($Path | Test-Path){
-                Write-Error "Path already exists."
-                return $null
-            } else {
+            if(!($Path | Test-Path)){
                 if ($PSCmdlet.ShouldProcess($Path, "New-Item -ItemType Directory")) {
                     $null = New-Item -ItemType Directory -Path $Path
                 }
-                
                 # Converting to Provider path
                 return $Path | Convert-Path
             }
-        } 
+
+            # Folder exists. Check if the psd1 file exists
+            $psd1Path = ($Path | Join-Path -ChildPath "$($Path | Split-Path -LeafBase).psd1")
+            if($psd1Path | Test-Path){
+                Write-Error -Message "Module already exists."
+                return $null
+            }
+
+            return $Path | Convert-Path
+
+        }
         catch {
             Write-Error -Message "Failed to add path."
             return $null
         }
     }
-
 }
 
diff --git a/public/Add-ModuleV3.ps1 b/public/Add-ModuleV3.ps1
index ce64dae..4121cc7 100644
--- a/public/Add-ModuleV3.ps1
+++ b/public/Add-ModuleV3.ps1
@@ -22,7 +22,7 @@ function Add-ModuleV3 {
 
     # Create the module folder. Fail if exists
     # This will filter if Path already exist to avoid overwriting an existing module
-    $modulePath = $modulePathString | New-Folder
+    $modulePath = $modulePathString | New-ModuleFolder
     if( !$modulePath ){ return $null }
 
     $moduleName = Get-ModuleName -Path $modulePath