The self hosted instance is limited to just your seat, since you are just a premium user. If you had a family plan or enterprise - you can use it to share with those folks, but the free org is only available on the cloud.
You can create an unlimited number of free user accounts and you can upgrade any of those individual users with a Premium Membership license.
A Premium Membership applies to individual user accounts but is unrelated to an Organization or sharing.
In order to create an Organization for sharing, you will need to first sign up for an Organization plan online, download a license file, and then upload it to your self-hosted server.
Self-hosting an Organization is only available with a Families or Enterprise Organization subscription.
Hope that helps!