H1b and S Corp

This is really a question of corporate law rather than immigration. All the corporate founders I've dealt with who were switching from an established H-1B to start a new company have formed either C Corps or LLCs, for what that's worth. From an immigration perspective, I _CAN_ tell you that, while it's fine to form a corporation, invest money in it and take dividends, you can't do any actual work for the company without a visa in place that permits it (this may be a concurrent H-1B or a new "change of employer" H-1B if the equity/control circumstances permit it, or something like an E-2, O-1 or even an L-1). Discuss your plans with an attorney before moving forward.

Yes, you can form a corporation and then make an S-election as a H1b holder, however, you may not be an employee, officer, or contractor for the company, as you H1b does not allow you to work in the US for other employers. I've structured companies for foreign residents in the past, and while sometimes restrictive, we usually figure out a way to setup the new US company and not jeopardize immigration status. I've actually just written a blog post on this subject which is linked below - it should be helpful in understanding the issue better. Best of luck!