Janda and Kelsey contributed $1 million each to the JKL LLC in exchange for 45% capital and profits interests in the entity. Lilli will contribute no cash, but has agreed to manage the LLCs business operations in exchange for an $80,000 annual salary and a 10% interest in the LLCs capital and profits (valued at $200,000). What are the consequences of the entity formation and Lillis compensation arrangement to the LLC members? To the LLC itself?