diff --git a/corporate/lib/stripe.py b/corporate/lib/stripe.py
index a78e3334fd..529942c3ab 100644
--- a/corporate/lib/stripe.py
+++ b/corporate/lib/stripe.py
@@ -700,9 +700,12 @@ def process_initial_upgrade(
     # TODO: The correctness of this relies on user creation, deactivation, etc being
     # in a transaction.atomic() with the relevant RealmAuditLog entries
     with transaction.atomic():
-        # billed_licenses can greater than licenses if users are added between the start of
-        # this function (process_initial_upgrade) and now
-        billed_licenses = max(get_latest_seat_count(realm), licenses)
+        if customer.exempt_from_license_number_check:
+            billed_licenses = licenses
+        else:
+            # billed_licenses can be greater than licenses if users are added between the start of
+            # this function (process_initial_upgrade) and now
+            billed_licenses = max(get_latest_seat_count(realm), licenses)
         plan_params = {
             "automanage_licenses": automanage_licenses,
             "charge_automatically": charge_automatically,
@@ -777,14 +780,16 @@ def update_license_ledger_for_manual_plan(
 ) -> None:
     if licenses is not None:
         assert plan.customer.realm is not None
-        assert get_latest_seat_count(plan.customer.realm) <= licenses
+        if not plan.customer.exempt_from_license_number_check:
+            assert get_latest_seat_count(plan.customer.realm) <= licenses
         assert licenses > plan.licenses()
         LicenseLedger.objects.create(
             plan=plan, event_time=event_time, licenses=licenses, licenses_at_next_renewal=licenses
         )
     elif licenses_at_next_renewal is not None:
         assert plan.customer.realm is not None
-        assert get_latest_seat_count(plan.customer.realm) <= licenses_at_next_renewal
+        if not plan.customer.exempt_from_license_number_check:
+            assert get_latest_seat_count(plan.customer.realm) <= licenses_at_next_renewal
         LicenseLedger.objects.create(
             plan=plan,
             event_time=event_time,
diff --git a/corporate/tests/test_stripe.py b/corporate/tests/test_stripe.py
index 32a6dc250c..1834d05a3b 100644
--- a/corporate/tests/test_stripe.py
+++ b/corporate/tests/test_stripe.py
@@ -3397,6 +3397,62 @@ class StripeTest(StripeTestCase):
         for key, value in line_item_params.items():
             self.assertEqual(renewal_item.get(key), value)
 
+    def test_update_licenses_of_manual_plan_from_billing_page_exempt_from_license_number_check(
+        self,
+    ) -> None:
+        """
+        Verifies that an organization exempt from the license number check can reduce their number
+        of licenses.
+        """
+        user = self.example_user("hamlet")
+        self.login_user(user)
+
+        customer = Customer.objects.get_or_create(realm=user.realm)[0]
+        customer.exempt_from_license_number_check = True
+        customer.save()
+
+        with patch("corporate.lib.stripe.timezone_now", return_value=self.now):
+            self.local_upgrade(100, False, CustomerPlan.ANNUAL, True, False)
+
+        with patch("corporate.views.billing_page.timezone_now", return_value=self.now):
+            result = self.client_patch(
+                "/json/billing/plan",
+                {"licenses_at_next_renewal": get_latest_seat_count(user.realm) - 2},
+            )
+
+        self.assert_json_success(result)
+        latest_license_ledger = LicenseLedger.objects.last()
+        assert latest_license_ledger is not None
+        self.assertEqual(
+            latest_license_ledger.licenses_at_next_renewal, get_latest_seat_count(user.realm) - 2
+        )
+
+    def test_upgrade_exempt_from_license_number_check_realm_less_licenses_than_seat_count(
+        self,
+    ) -> None:
+        """
+        Verifies that an organization exempt from the license number check can upgrade their plan,
+        specifying a number of licenses less than their current number of licenses and be charged
+        for the number of licenses specified. Tests against a former bug, where the organization
+        was charged for the current seat count, despite specifying a lower number of licenses.
+        """
+        user = self.example_user("hamlet")
+        self.login_user(user)
+
+        customer = Customer.objects.get_or_create(realm=user.realm)[0]
+        customer.exempt_from_license_number_check = True
+        customer.save()
+
+        reduced_seat_count = get_latest_seat_count(user.realm) - 2
+
+        with patch("corporate.lib.stripe.timezone_now", return_value=self.now):
+            self.local_upgrade(reduced_seat_count, False, CustomerPlan.ANNUAL, True, False)
+
+        latest_license_ledger = LicenseLedger.objects.last()
+        assert latest_license_ledger is not None
+        self.assertEqual(latest_license_ledger.licenses_at_next_renewal, reduced_seat_count)
+        self.assertEqual(latest_license_ledger.licenses, reduced_seat_count)
+
     def test_update_licenses_of_automatic_plan_from_billing_page(self) -> None:
         user = self.example_user("hamlet")
         self.login_user(user)