what is it and how to form one?
Any corporation with less than or equal to 100 shareholders where the gains and the losses are passed onto the shareholders for the purpose of taxation, similar to the workings in partnership or sole proprietorship is referred to as S-Corporation. Given that the shareholders receive every penny/cent of the corporate net income including that of their individual income from returns on taxes, there is no double taxation concept in S-Corporation.
Any domestic C-Corporation can get an exemption from double taxation (each to the shareholders and the corporation separately) by preferring to be treated as an S-Corporation. Also S-Corporations are generally not considered for the income tax by federal authorities apart from passive income and a few capital gains. When filing their returns, the shareholders of the S-Corporation will include the share of loss or income of the corporation as part of their filing.