Folders created on root level AFP share have incorrect permissions

Not sure if this is the right place to post this, but here goes….

Our fileserver is running Windows Server 2003. File Services for Macintosh is installed and running, and we are sharing a folder using the AFP protocol.

Users are able to authenticate to the shared folder using AFP. They can see files, and have read/write access. However, when users create a folder on the root level of the share, the folder does not inherit permissions. Instead of members of Domain\Domain Users having full control, they have no access. The only user with access to the folder is the user who created it. This does not occur under OS 10.5 and lower. It also does not occur when connecting via SMB.

I’m at a complete loss. Could anyone suggest a solution?

Thanks.
Eric