We've migrated a client from google apps to an MS Exchange 2010 SP2 on-premise setup. The setup /prepareAD went well, and the software was installed with the Administrator account. We've used the Exchange Management Console to setup mailboxes and had to google up the appropriate workarounds such as going into each users Advanced Security Settings and selecting "include inheritable permissions from this object's parents", and changing their logon-to from specific machines to "all computers" so that they can connect to Outlook Web Access, and in turn so their Outlook 2007-2010 clients can connect to Exchange.

Sending and receiving emails are working well.

Now that all this is in place, we can create Dynamic Distrubution Lists with no problem, but as soon as we try and create a DISTRIBUTION LIST, either in the EMC or the Exchange PowerShell, we get an error. As the error message in the powershell is more verbose, I include this if anyone can suggest how we remedy this:

[PS] C:\Windows\system32>new-DistributionGroup -Name 'projects' -SamAccountName 'projects' -Alias 'projects'

Active Directory operation failed on DC.cppe.local. This error is not retriable. Additional information: Access is denied.

Active directory response: 00000005: SecErr: DSID-031521D0, problem 4003 (INSUFF_ACCESS_RIGHTS), data 0 + CategoryInfo : NotSpecified: (0:Int32) [New-DistributionGroup], ADOperationException + FullyQualifiedErrorId : 1EA5CD3E,Microsoft.Exchange.Management.RecipientTasks.NewDistributionGroup