Record your current structure and the conditions that would make you change it.
Find your notes from lessons 5.1, 5.2 and 5.3, take a blank page, and set aside about twenty minutes. You'll use them to write a structure record, a single page that sets down the business structure you've chosen, which you then file with your annual review.
Each of those three lessons answered one part of the structure question. Lesson 5.1 dealt with whether you need to register. Lesson 5.2 compared the two main structures. Lesson 5.3 looked at the signals that would make running a company worth it. If the answers stay only in your head, within a year they shrink to a vague memory and a conversation you half remember. A page you can take out of a folder keeps them intact.
There are four steps, and each produces one part of the page. You record your current structure, with any action due and its date. You list the ways you could end up owing money and what protects you against each one. You write three signals that would make you change structure. You add questions for an accountant, along with the date you'll look at the page again.
Wherever you're not sure of something, phrase it as a question. Guesses on paper tend to read as facts by the following year, while a question remains open until somebody answers it.
Mei (an invented example, and the amounts in her case are made up too) works freelance on design and campaign launches. Her page is built alongside yours below.
Write one line naming your current structure. It will be one of three: unregistered, registered sole proprietor, or company. Then go back to what you worked out in lesson 5.1 and check whether anything has to change straight away. If you should already be registered and aren't, you have an action for this week: register through ACRA's Bizfile portal, which replaced BizFile+ on 9 December 2024, and put the date beside it on the page. If a client has asked for a UEN, write that down as well, since registering is how you get one.
Mei hasn't registered. Under ACRA's guidance she has to register as a sole proprietor, so her opening line commits her to registering through Bizfile this week. A new client of hers needs a UEN, which registering will give her, and she adds a note about it.
A liability exposure is any way your work could leave you owing money. Give each one its own line. Next to it, put what protects you against it at the moment. That protection, your coverage, takes one of three forms: a term in a contract, an insurance policy, or the structure itself. The structure only counts when you operate as a company.
Some lines will have nothing beside them. Write "nothing covers this" and carry on; leaving a gap visible is not a failure. These gap lines tell you more than anything else on the page, and Module 6 takes them and turns them into a plan.
Mei writes three lines. A client might say one of her designs infringed someone's copyright: her contract has a clause setting out who supplies which images, and she has no insurance for it. A client might not pay for a S$6,000 project: her deposit terms cover part of that. She might miss a deadline on a campaign launch: a contract clause limits what she owes to the fee for that job.
A change signal is a specific event that would make you think again about your structure, for example about forming a company. Copy across the three signals you wrote in lesson 5.3, and test each one by checking that you would notice the day it came true. "When I'm bigger" fails that test, because you could never point to the day it happened. "When a single contract is worth more than three months of my income" passes, because you would know when you signed it.
Below the signals, list what you would want to ask an accountant once one of them is reached. Begin with the questions from lesson 5.3 and change them to fit your own work. An accountant's time is easier to use well when you walk in with your questions already on paper.
Mei's signals are a single contract worth more than three months of her income, two clients in one year who need her to be a company, and an accountant's view that the tax saving would pay the running costs with room to spare. She writes four questions for the accountant. One she added herself: if she incorporates, can the company take over the client contracts she already has, or will she need to sign new ones?
Pick a date to check the page again, ideally your annual review in module 8, and write it across the top. A structure decision that nobody reopens is no decision at all, and the date at the top is what brings you back to it. Mei writes December, when she does her annual review.
Her completed page shows:
registering as a sole proprietor this week copyright claims handled by a contract clause, with no insurance behind it unpaid projects partly covered by deposits missed deadlines capped by her contract her three change signals her four accountant questions, including the one about moving her contracts across the December review date
With your own page written, you no longer have to wonder whether you've been doing something wrong. You can see what you chose, what would make you change it, and when you're going to look again.
Gather your notes from lessons 5.1 to 5.3 and fill in the four parts in the activity.
Complete the one-page structure decision: your current choice, your risks, your signals for changing and your questions for an accountant.
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