Add a user called 'ubuntu':

useradd -d /home/ubuntu -m ubuntu

You need both the -d and -m opitons here. If you just run useradd ubuntu here, home dir will not be created. You have to create it manually and change the owner.

Yes, it is that stupid.

Check user and home dir if you want:

cat /etc/passwd | grep ubuntu
ls /home/ubuntu

There is another cmd users, which will show all users currently logged in, but not all users on host, even no options to do that.

Set password:

passwd ubuntu

It will ask you for the new password.

Add user to sudo group:

usermod -a -G sudo ubuntu

Run sudo without password:

visudo

Tip: default editor will be nano, you can set editor by this, either in terminal or .bashrc|.zshrc:

export EDITOR='vim'

Append this at the bottom:

ubuntu ALL=(ALL) NOPASSWD:ALL    

Or for all sudo group:

%sudo ALL=(ALL) NOPASSWD:ALL    

Tip: you had better put it at the end. If not, some times it will be overrided by following settings and not working.

Add user to www-data:

It is also useful to add user to the www-data group:

usermod -a -G www-data ubuntu

Check user groups:

id ubuntu

You will see something like this:

uid=1000(ubuntu) gid=1000(ubuntu) groups=1000(ubuntu),27(sudo),33(www-data)

SSH to server

Now, you can login to your ubuntu server with your shinny new user like this:

ssh ubuntu@xxx.com

It will ask you to input password.

To make things easier, you can config your ssh so you can ssh to server with a short alias and nopassword.
First, create your ssh config:

cd .ssh
touch config
vim config

Add this:

Host s1
HostName xxx.com
User ubuntu

Second, generate your ssh key:

ssh-keygen -t rsa

Just press enter for default path and empty passphrase.
A key pair has been generated in .ssh: id_rsa && id_rsa.pub

Copy your public key to server:

ssh-copy-id s1

Sometimes this command does not work, then you can do it manually:
Just add the content of .ssh/id_rsa.pub on your localhost to /home/ubuntu/.ssh/authorized_keys on server, all done.

Now, you can login with:

ssh s1

Enjoy!