Hi Govind,
I try to answer your question, even though I miss little bit of the context.
You create a company, below the company a business residence and below that you create directly profit centers. As long as you your business residence is below a cost center or a cost center, the system does not complain. Even when I enter a cost center/ reporting line unit below the "only profit center" the system does not complain. I have seen org structures, where you have a complex profit center reporting structure below the company and business residence (so you have here a cost center above) and all the cost centers and employees in a different structure.
I also attach below a structure, where I tested out to use Profit Centers only, and I could not see issues. Can you maybe clarify your concrete scenario? Where is the Profit Center, where are your Cost Centers and employees?
Best regards
Marlene