There are 2 ways to create new sites in SharePoint in Office 365.  First from the SharePoint tab.

Creating the site from here asks you nothing apart from the site name.  Not exactly scientific – this is not the right approach to SharePoint.

The site gets created with unique permissions.

If you create it from the top level SharePoint site however, you get the options you need to architect things properly.

Now you get prompted with the things you are supposed to so you can make the best decision based on your information architecture planning.  There are no shortcuts here, do proper planning and enforce proper governance or you will end up rebuilding the whole thing one day.