Ah yes, the eternal battle of organizing your files and scripts. I'm a fan of modularity. In your case, I would create two scripts: login.
Php and signup. Php The login. Php would have everything needed to login or reset a password etc.And the signup page would include everything needed to register a new user.
There is no right or wrong way to do it but I like to keep things clean and logically organized. Going through a 700 line PHP script is no fun. You could also have one script with your if statements act as a controller which would include other files as needed for maintainability.
Example if($logging_in) then include login. Php if($signing_up) then include signup. Php Hope that helps to shed some light on your situation.
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