I would suggest that most small businesses ‘targeted’ by companies offering what turn out to be swindles (legal, but swindles nonetheless) are sole traders.
The companies that rip you off usually are not breaking rules. They sell you something not worth a toss, it all goes pear-shaped and they fold only to spring up again like the phoenixes they are - same address, same directors, new name. It’s a gotcha because, as a sole trader, you are personally liable for all of the business debts.
Of course, if you were a limited company there would be no gotcha. Or at least they would have to get you to sign personal guarantees to get you tied into a worthless contract and I suspect that would draw your attention to the fact that this might be a dodgy deal on offer.
And if they didn’t demand personal guarantees and folded leaving you stuck, you can unstick yourself by folding up neatly and re-emerging box fresh to fight another day. Ask your accountant for advice.