Where are users and permissions for an NTFS folder stored?

The correct answer is that user permissions for an NTFS folder are stored in the file system. NTFS, or New Technology File System, utilizes a complex structure for managing files and their associated permissions.

When you set permissions on folders and files within an NTFS volume, these permissions are embedded directly into the file system as part of the metadata for the files and directories. This metadata includes Access Control Lists (ACLs), which specify which users or groups have permissions for the object and the type of access they are granted (such as read, write, modify, or full control).

This architecture allows for fine-grained control over file security on a per-object basis, independent of external systems like Active Directory or databases. While Active Directory can manage user accounts and might be involved in the broader security of a network, it does not hold the specific permissions for files on an NTFS volume. Instead, NTFS's security model is designed to operate directly on the file system itself, ensuring that access permissions are enforced at the file level regardless of the user's local machine or network context.