The term "multiple businesses" connotes multinational corporations with intertwining ownership of many entities. But many entrepreneurs own and run two or more businesses; they may conduct these different business activities through various entities.

There are compelling reasons for operating different business activities through separate entities, but there are also reasons for running every activity within a single company. Here are the factors to consider:

Business reasons

From an administrative perspective, it may be easier and less costly to run a single entity. In this case, all of the income and expenses from the separate activities are taken into account for a single entity; a single tax return is filed. This saves on accounting fees.

However, not all activities may be suitable to be joined in a single business. For example, a business coach may operate for years as a sole proprietorship, then acquire a strip mall that she put into a limited liability company (LLC). Theoretically, both could operate under the LLC, but from a marketing standpoint the separate entities make more sense.

Legal reasons

There are usually no bars under state law to operating different activities within a single company, but separate entities are a way to create the utmost personal liability protection for owners.