$5$ friends decided to organize a corporation to enter into the resort business by contributing P$1,000,000$ each in exchange for shares in the corporation. However, finding that the process of registering with the Philippine Securities and Exchange Commission to be tedious and time$-$consuming, they started operations of the resort before they were incorporated and decided to just split the profits of the resort while their papers with the Philippine SEC was pending.

Which of the following will not be correct?