US regulation

The US taxing system provides two ways of treating business income:

(i) The first and most grasping-to-mind is to tax the person who owns the business (for instance in the case of a sole proprietorship) ; it is the simplest form of business entreprise.
The paperwork consists in the form 1040 that is filled at the end of the fiscal year.
These types of business entities are called « passed-through entities ».
A Partnership is a business entity but it is not taxed apart from the partners : each partner gets a Schedule – K indicating his or her share in the Partnership.
Note that LLC can also choose pass-through taxation procedure (with certain conditions).
Sub-Chapter S works for closely-held entities that can elect pass-through taxation.

(ii) The second taxation process is where the business entity is a second tax-payer. All corporations that are publicly-traded are separately taxed.
It is referred as the double-tax system. The corporate entity pays taxes on its income ; then if that income is distributed to the shareholders, they also pay taxes to the extent of the distribution received.
This is the reason lawyers use in that situation the expression of « C-corporations » : they refer to entities that are taxed under Sub Chapter C of Chapter I of USC.