AFAIK, a self employed sponsor is supposed to provide his/her form 1099 in support of the affidavit of support which is for his/her personal income filing. If the sponsor wants USCIS to give consideration to their business ownership, like I suspect your sponsor is trying to do, then he needs to include an official report of his company's commercial rating. In addition, you need a copy of the sponsor's GC or US passport.
For question 8, that section should be for his wife, kids and any other family member currently dependent on him (outside of you and your family). He will need to attach an extra sheet of paper if he has to list more than 3 people.
For question 11, he has to select the "intend" box. If he selects the 'do not intend' box, he might as well not provide you with the affidavit to start with.