The official wording is"Self-employed business owner. Students on OPT may start a business and be self-employed. In this situation, the student must work full-time. The student must be able to prove that he or she has the proper business licenses and is actively engaged in a business related to the student’s degree program." I don't know what kind of proof, if any, the school is going to require for self-employed people. I don't think the school is going to ask for any proof, at least the one I just talked to didn't. I just called a school nearby and asked the ISO what info. they would need from someone who is self-employed on OPT. They said they will need the name of the business,  start date and business address. They said they will be able to update the SEVIS once they have that.

I wouldn't suggest your friend to go this route (i.e. self-employed business owner). I don't know anyone who has tried it. Most people get an unpaid volunteering job in their field of study and do it for 20 hours weekly to maintain status. Since no one actually verifies the employment, some people just provide their ISO  name of a company (owned by someone they know or just some random company), a start date and employer's mailing address.

For regular OPT

Rule: You have to be employed (either paid or unpaid) at least 20 hours weekly in your field of study. Even volunteering counts as long as the work is related to your  field of study.

Reality: The way to report your employment is by e-mailing your international student office (or filling a form, if your school uses any), The school then puts this information in SEVIS. You just need to give them the name of the company, start date and employer's mailing address. No one verifies this. You could easily lie about this and get away with it.

For OPT extension

Rule: The company needs to be e-verified and the employment needs to be paid
Reality: You have to have the company run your paycheck. As far as I know, there is no way around it.