The alternative to the previous two modeling patterns is to keep your entities completely separate. This could prove to be an efficient design as it maximizes your instance's diversity. You can create a multitude of entities without overcrowding and without overlapping functionality. Nonetheless, as a best practice, promote reusability where possible. Keep in mind that a Dynamics 365 online instance has a limit on the number of custom entities that can be created. The limit also includes custom entities introduced by deploying third-party solutions. At the time of writing, the limit is 300 custom entities per Dynamics 365 instance. You can check your limit by navigating to Settings | Administration | Resources In Use:

Your new ER diagram is highlighted in the following screenshot:

The advantages of a completely normalized model are:

• No coupling between entities, resulting in cleaner and easier to manage solutions
• Full independent control using security roles for each of the entities
• Positive user experience with clean independent forms
• No need for complex configuration or customization to show and hide irrelevant sections

This model also has some cons, some of which are:

• Search results will appear in different lists
• Cannot combine views with both entities
• Some out-of-the-box entities (contact, account, and activities, among others) have well-defined core structures that could be difficult to recreate (for example, the regarding field on activities).