A 401(k) should be terminated when the sponsoring entity is no longer in existence. When that happens for a self employed person is a bit of a question though. If I was intending to cease all business operations as a sole proprietor I would probably close the plan at that point. If you feel comfortable claiming that your business is still an ongoing concern then amending your plan to another custodian with better investment options seems like a good idea. If you currently own a corporation you're closing that would definitely require closing the plan, although maybe you could open a new one as a sole proprietor if you'll continue to do some business.
If the better liability protections of employer sponsored plans over IRAs are the advantages you're thinking of, those don't apply to solo 401(k)s, so there's no disadvantage to rolling over to an IRA. The only other advantage of a solo 401(k) I can think of is that it doesn't cause problems with backdoor Roth contributions, but that only applies if you'll continue to have at least $6000 of earned income and have a high total income. Even then, without a workplace plan you could contribute to a deductible traditional IRA and make a taxable Roth conversion with the same net effect of contributing to Roth.
Long story short, I'd roll over to an IRA unless you have a reasonable expectation that you'll continue to do some self employed work.
I have no idea how old you are but one benefit of a 401k over an IRA is penalty-free withdraws at 50 if you play your cards right.
I think you're thinking of separating from service in or after the year you turn 55, not 50. I'd want confirmation that this would work for a self employed person before relying on it. I'm pretty sure it wouldn't work for a sole proprietor as you couldn't really say "I've separated from service, so I should be eligible for penalty free withdrawals" and also "the business is still operational and eligible to sponsor a retirement plan" since the individual is the business. I'd have similar concerns about a single person corporation, but that might be more plausible, I don't know.
