Mellie, Nellie and Shelley are cousins. When their bachelor Uncle Charlie died, they inherited a large resort in Pangasinan from him. In honor of their late Uncle Charlie, the three women decided to set up a partnership and establish a half-way house or sanctuary for at-risk LGBQT+ teenagers who were made homeless or rejected by their families. They contributed their respective shares of the resort property into the common fund of the partnership. They operated the sanctuary with income from the beachside cabana rentals portion of the resort as well as donations from civic-minded citizens. To obtain the exemption from income tax from the cabana rentals, the women needed the SEC to issue their Articles of Partnership. However, the SEC refused, stating that the partnership is not valid.

Is the SEC correct? Why or why not? Explain your answer.