A "S" Corporation is formed the same way a regular "C" Corporation is formed. A corporation is a legal entity created under the laws of a particular state. It is distinct from its owners, who are called shareholders. The only difference between an "S" and a "C" is that an "S" corporation is one in which an election has been made to be treated under Subchapter "S" of the Internal Revenue Code for federal tax purposes. The filing of this "S" election permits the corporation to avoid a double taxation of its income, bypassing the corporate tax level. Generally, Form 2553 must be filed with the IRS within 75 days of incorporating. Many states also require a separate form be filed with them to allow "S" status. Other states and cities, such as New York City, do not acknowledge "S" status. As a result of these complexities, the election of "S" status should not be considered nor attempted without consulting your local CPA or attorney.