Can you pay one person from one company through another payroll system that belongs to a completely different company (whose name is on the check) but both companies are owned by the same person?

Will the one company be billing the other one for those services, show them working for company 1 and then billing company 2 for those services. There would have to be credit and billing from one to the other to justify it being paid.

Also which company is paying his workers comp insurance and who is paying the taxes to the state

I'll try my best to explain the situation. I'm not familiar with this at all.

D workes for company 1 with no benefits. D is paid through Company 2 (name on check) under the hours and wages set by company 1. Both Companies are owned by the same person. The reason it would be ran through company 2 is so the correct amount of taxes are taken out of the pay (and other things like garnishments and Child Support). Company 1 supplys the money for the check.

The way it was explained to me, is that if company 1 sent the money needed for pay roll and sends a "fee" payment for the cost of doing the payroll through company two (bascially split the cost 50/50 between the two companies), everything is OK. My basic question is, is this legal?

I hope I explained this well enough.