Forming an LLC may be a good option for businesses that hire employees, perform services that are subject to a lawsuit or have multiple owners. For instance, contractors (i.e., construction or repair services), restaurants and stores may want to consider forming an LLC. Freelancers and those with small side hustle incomes might be better off remaining sole proprietors. Speaking with a tax professional can help you decide if the benefits of becoming an LLC are worth the cost and paperwork.