Place the number corresponding to each of the following characteristics in the appropriate section of the diagram. If a characteristic applies to both proprietorships and partnerships, place that number in the overlapping section.

1. Creditors have the first claim to the assets of the business

2. An association of individuals

3. Relatively easy to form

4. The simplest form of business organization Proprietorship Partnership

5. Relatively free from government regulation

6. Unlimited liability 

7. Income taxes are paid at a personal level rather than at a business level.

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Proprietorship Partnership