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Should a domain user who owners a folder be able to create sub-folders (Windows Server 2008 R2)

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When deploying our server application, on Windows Sever 2008 R2, we create a folder in "C:\Program Files" with an local administrator user and change the owner of the folder to that of a particular domain user.

When the application is running under that domain user, it is denied access when trying to create a sub folder.

My assumptions are:

  1. That in terms of ACLs, there is little to no difference between a domain user or local user being the owner of a folder.
  2. That by being the owner of a folder, they have "Creator Owner" permissions.
  3. By being "Creator Owner", they have necessary permissions to read / write permissions to a folder without needing to may any additional ACL changes.
  4. That no parent folders, i.e. "Program Files" are imposing any restrictions. After all, the user is the owner and "Creator Owner".

Since the domain user can not create sub-folders in my case, could you please tell me what is wrong with my assumptions? 




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