Really complicated and nuanced stuff unfortunately. What's clear is that one can incorporate, get office space, build a product, and even get funding and that one can't get paid cash for work done. Everything else in between is nuanced, such as generating revenues if not taking a draw or cut. I'd be happy to talk this through with you and anyone else but my general approach is that once the business is real (not a great definition, I know) and not just a hobby or side project, one needs to get work authorization.
My I-140 is approved and my wife has an EAD. Are there any restrictions that would prevent her from opening an LLC and getting paid for her freelance work through it?
Also, once the business set up..what if it generated profit as h1bs are not allowed to get paid by other entities..