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Ability to work as freelancer or form Pvt Ltd

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I am currently working as a IT (software) Project Manager. I am on H1-B working full time for a consulting company. I-140 is approved with date in Sep 2012. 

A known contact wants my help in developing a website. It will be a year long project. I have few questions:

  1. Will it be considered as a conflict of interest? There is no such clause in my consulting company documents. And I am working as Project Manager and ask is for software development.
  2. Can I freelance and file 1099?
  3. If not, can I form a pvt limited company in US?
  4. If not, what other options I have to be able to help?

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