diff --git a/rm-server/config/alfresco/module/org_alfresco_module_rm/rm-model-context.xml b/rm-server/config/alfresco/module/org_alfresco_module_rm/rm-model-context.xml
index f7dc62dc12..db13fd4aec 100644
--- a/rm-server/config/alfresco/module/org_alfresco_module_rm/rm-model-context.xml
+++ b/rm-server/config/alfresco/module/org_alfresco_module_rm/rm-model-context.xml
@@ -56,6 +56,7 @@
       parent="org_alfresco_module_rm_BaseBehaviour">
       <property name="dictionaryService" ref="DictionaryService"/>
       <property name="recordsManagementIdentifierService" ref="recordsManagementIdentifierService"/>
+      <property name="recordFolderService" ref="recordFolderService" />
    </bean>
 
    <bean id="org_alfresco_module_rm_RmSiteType"
diff --git a/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/model/behaviour/RecordContainerType.java b/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/model/behaviour/RecordContainerType.java
index 690c24f2c8..3d782ab7fd 100644
--- a/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/model/behaviour/RecordContainerType.java
+++ b/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/model/behaviour/RecordContainerType.java
@@ -21,10 +21,11 @@ package org.alfresco.module.org_alfresco_module_rm.model.behaviour;
 import org.alfresco.model.ContentModel;
 import org.alfresco.module.org_alfresco_module_rm.identifier.IdentifierService;
 import org.alfresco.module.org_alfresco_module_rm.model.RecordsManagementModel;
+import org.alfresco.module.org_alfresco_module_rm.recordfolder.RecordFolderServiceImpl;
 import org.alfresco.repo.node.NodeServicePolicies;
+import org.alfresco.repo.policy.Behaviour.NotificationFrequency;
 import org.alfresco.repo.policy.JavaBehaviour;
 import org.alfresco.repo.policy.PolicyComponent;
-import org.alfresco.repo.policy.Behaviour.NotificationFrequency;
 import org.alfresco.repo.security.authentication.AuthenticationUtil;
 import org.alfresco.repo.security.authentication.AuthenticationUtil.RunAsWork;
 import org.alfresco.service.cmr.dictionary.DictionaryService;
@@ -55,6 +56,9 @@ public class RecordContainerType implements RecordsManagementModel,
     /** Identity service */
     private IdentifierService recordsManagementIdentifierService;
     
+    /** record folder service */
+    private RecordFolderServiceImpl recordFolderService;
+    
     /**
      * Set the policy component
      * @param policyComponent   policy component
@@ -94,6 +98,14 @@ public class RecordContainerType implements RecordsManagementModel,
         this.recordsManagementIdentifierService = recordsManagementIdentifierService;
     }
     
+    /**
+     * @param recordFolderService   record folder service
+     */
+    public void setRecordFolderService(RecordFolderServiceImpl recordFolderService)
+    {
+        this.recordFolderService = recordFolderService;
+    }
+    
     /**
      * Bean initialisation method
      */
@@ -140,11 +152,22 @@ public class RecordContainerType implements RecordsManagementModel,
                             // We need to automatically cast the created folder to RM type if it is a plain folder
                             // This occurs if the RM folder has been created via IMap, WebDav, etc
                             if (nodeService.hasAspect(child, ASPECT_FILE_PLAN_COMPONENT) == false)
-                            {                
-                                // TODO it may not always be a record folder ... perhaps if the current user is a admin it would be a record category?? 
+                            {   
+                                // check the type of the parent to determine what 'kind' of artifact to create                              
+                                NodeRef parent = childAssocRef.getParentRef();
+                                QName parentType = nodeService.getType(parent);
                                 
-                                // Assume any created folder is a rma:recordFolder
-                                nodeService.setType(child, TYPE_RECORD_FOLDER);     
+                                if (dictionaryService.isSubClass(parentType, TYPE_FILE_PLAN))
+                                {
+                                    // create a rma:recordCategoty since we are in the root of the file plan
+                                    nodeService.setType(child, TYPE_RECORD_CATEGORY);
+                                }
+                                else
+                                {
+                                    // create a rma:recordFolder and initialise record folder
+                                    nodeService.setType(child, TYPE_RECORD_FOLDER);                                    
+                                    recordFolderService.initialiseRecordFolder(child);
+                                }
                             }                           
     
                             // Catch all to generate the rm id (assuming it doesn't already have one!)
diff --git a/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/recordfolder/RecordFolderServiceImpl.java b/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/recordfolder/RecordFolderServiceImpl.java
index 3e75b406df..534e633f30 100644
--- a/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/recordfolder/RecordFolderServiceImpl.java
+++ b/rm-server/source/java/org/alfresco/module/org_alfresco_module_rm/recordfolder/RecordFolderServiceImpl.java
@@ -99,7 +99,7 @@ public class RecordFolderServiceImpl extends    ServiceBaseImpl
     public void onCreateChildAssociation(ChildAssociationRef childAssocRef, boolean bNew)
     {
         NodeRef nodeRef = childAssocRef.getChildRef();
-        if (nodeService.exists(nodeRef) == true)
+        if (nodeService.exists(nodeRef) == true && instanceOf(nodeRef, TYPE_RECORD_FOLDER))
         {
             initialiseRecordFolder(nodeRef);       
         }