It's all about the taxes - and how the companies are defined in how they file their taxes - sole proprietorships, partnerships, or corporations (and the type) - is he an employee (you're withholding); is he a contractor (you'll have to give him 2 1099's of individual earnings of each company if the two companies have different 04 numbers); if you're paying him under the table - I'd advise you to stop - IRS crackdowns could cost you everything and even get you jail-time. There may be other local and State laws you need to check into - some company owners take the chance of "cornering the market" by owning two competing companies - effectively "price fixing" and "monopolizing" - which are illegal as well - you need to talk to your company lawyer and CPA - they'll know the laws in your location and situation.
It depends if the two different businesses carry out different operations and if it is on permanent basis. Of course you will need paper work and new terms of employment if it is on permanent basis. This applies especially if the kind of job you are going to do is whole different.