You can have multiple Paypal accounts

There are times when you want two Paypal accounts, e.g. you currently have a personal account but you want another account to handle your business or premier account. For this case, Paypal is allowing an individual to have two accounts: one personal and one premiere / business account.

However, you can't register the same credit card in more than account. For this you have to use a separate credit card, or remove the previous one and register it to the new account.

In summary, it's not illegal to own multiple Paypal accounts.

From their help center:
Yes. You can have one Personal account and one Premier or Business account. You can add more email addresses, debit or credit cards, and bank accounts to your account, but each account must have its own email address and financial information. You can also upgrade your Personal account to a Premier or Business account.