A promoter suffers from following liabilities
(i) He should not make any secret gains out of the dealings of the company.
(ii) He must deposit all the money received on behalf of the company in the company’s bank account.
(iii) He must surrender profit made during promotion of the company.
(iv) He must exercise due care and diligence while performing the work of promotion.
(v) He is personally liable for the preliminary contracts with the third parties if they are not approved by the company.