How to Fairly Share Equity?

I'm a freelancer and started to develop a prototype in my spare time which already caused a lot of time and energy. As everyone I think it also has a nice market fit and with some work I should be able to develop a full product and find a few customers. Though, I am not a sales guy and I think someone with sales expertise would definitely help to push it forward. Hence, I got in touch with another small company and they suggested that I (including the prototype) join their company as CTO. The company offers consulting in the same area and consists mainly of one freelancer who engages other freelancers depending on the projects. I know him from previous business and some of the freelancers as well so they are not complete strangers. I suggested to found a new company to clearly separate it from the previous work but they stated that it would be too much effort.

Now I am a bit unsure how to approach the situation: - should I insist to found a new company? how would you split the equity in that case? is there any best practice? - what would you demand in case I would decide to join as CTO? Equity? Since it's already an established company it has a certain value but the value is actually only based on the current/previous consulting gigs which makes it kind of difficult. Also, I don't know what happened in the past and do not know if the company has any liabilities. - if I join them, how can I "protect" the code so they cannot simply fire me afterwards and take it for them? how can I ensure that I can still use the code afterwards? - is the code really worth anything at the moment?

Thanks for your insights!