first, i'm lucky to be an American citizen.
there are countless middlemen providers such as Incorporate.com, Stripe Atlas, and others which make the process of establishing a legal entity relatively painless and inexpensive (< $500 /year for a mailbox, dedicated physical address, basic reporting). even without these tools, filing an entity directly with a state (e.g. Delaware) and keeping an eye on annual filing notices only takes a couple days and a few signatures. this is how i did before 2015.
since we run a fund with multiple projects, the first thing we had to decide in 2017 was whether to create separate entities for each.
upsides of using 1 entity
most buyers prefer acquisition via an APA (Asset Purchase Agreement), making the "separate entity" strategy essentially useless. meanwhile, a fund can denote Businesses A, B, and C as DBAs (doing business as) aliases for a singular entity.
admin work aside, having just 1 business entity saves thousands per year on renewal fees and statutory agents.
downsides of using 1 entity
if somehow we make a huge mistake at Project A, sibling projects could be impacted by a legal suit. we're also unable to transfer a Stripe.com billing account to new owners, because they're tied to our parent business entity.
as to the first disadvantage, we've luckily had zero legal issues and have enjoyed maintaining just 1 entity versus 10+ over the years. as for the Stripe component, their support team assists in migrating the core data itself (customer objects, credit card details) between accounts in just a couple days, following a support ticket.
final thoughts on separate entity vs subsidiary
in a couple rare cases we've sold or bought, a wholly owned entity. even now, Fork Equity LLC is just 1 of ~3 we maintain.
when we buy out a project with its own "legal stack" attached, part of our negotation is to share the burden of the previous year's tax liabilities, which we will be responsible for filing. sometimes this is worth the effort to make a deal go through, but our preferred scenario is to manage multiple assets under 1 parent entity.