Ace Company is a valid limited liability company (which is not a corporation). During the current year Ace is about to make an entity status election to be treated as a corporation for income tax purposes followed by a valid and timely S corporation election. Ace currently has the following attributes: for state law purposes, it has 27 limited liability company (LLC) members who are all individual US citizens; formed in the United States; an operating agreement (which is a contract among the 27 LLC members and Ace setting forth terms of operation) that specifies, among other things, that 10 members are equity members and the remainder of the members are stated pay members such that each of them receives only a stated amount each year based on hours worked regardless of Aces income whereas the equity members may receive more or less of Aces profits based on Aces performance each year. It also specifies that liquidating distributions are to be based on positive capital accounts rather than ownership percentage; and manufactures promotional items (such as playing cards, t-shirts, etc.). Required: What problems may exist for Ace to make and maintain an S election, if any? Explain in detail. What recommendations can you provide to Ace for any perceived problems you describe so that Ace can make an S election? Explain in detail.