You have a Microsoft 365 subscription that contains two users named User1 and User2.

Microsoft 365 or Office 365 subscription comes with a set of admin roles that you can assign to users in your organization using the Microsoft 365 admin center. Each admin role maps to common business functions and gives people in your organization permissions to do specific tasks in the admin centers1.

To ensure that User1 can create groups and manage users, you should assign the User Administrator role to User1. This role allows User1 to create and manage all aspects of users and groups, including resetting passwords for non-administrative users1.

To ensure that User2 can reset passwords for non-administrative users, you should assign the Helpdesk Administrator role to User2. This role allows User2 to reset passwords, manage service requests, and monitor service health for non-administrative users1.