Demand Promissory Note
A written promise to repay, on demand.
A simple written promise to repay a loan, where the lender can demand repayment at any time rather than on a fixed schedule. Founders and early-stage companies use these for short-term loans, such as a founder loaning the company cash before a financing round closes.
- Business days
- 1–5Business days
- Lawyer reviewed
- 100%Lawyer reviewed
- Surprise bills
- $0Surprise bills
What a Demand Promissory Note should include
Principal — the amount lent, and confirmation it was advanced.
Demand feature — the lender's right to require repayment, and the notice required.
Interest — the rate, if any, and how it accrues.
Prepayment — whether the borrower may repay early without penalty.
Default — what counts as default and what follows.
Governing law — which province's law applies and where a claim would be brought.
When you need one
When money moves and both sides want it recorded — a shareholder loan, a director advance, a short loan between related companies. It is the document most often skipped between people who trust each other, and the one most missed when a company is being sold or audited.
How Ruby drafts it
Tell us what you need
Describe the agreement, your business context, and how fast you need it. A few smart questions, not a legal questionnaire. Your price and turnaround are confirmed before anything starts.
Ruby drafts it
Once pricing is confirmed a qualified Ruby lawyer is assigned to your file, and the first draft is built from your answers and real Canadian statute.
A licensed lawyer reviews every line
A lawyer licensed in Canada reviews and finalizes the document before it reaches you, and writes the plain-language summary that comes with it.
Signed, stored, and yours to revisit
You get the final agreement and its summary, stored so you can come back to it rather than hunting through email for the current version.
The fee is set before any of that starts. Hourly billing moves as scope does; a flat fee is one number, confirmed in writing, that doesn’t change after the work is done. See how Ruby prices agreements.
Or did you mean one of these?
These get confused with a Demand Promissory Note often enough to be worth ruling out before you buy the wrong document.
Questions people ask
The lender can call for repayment whenever they choose, rather than waiting for a fixed maturity date. That flexibility suits the lender and makes the borrower's planning harder, which is the trade-off.
Nothing stops the loan existing without one, but the absence of paperwork is a routine finding in diligence and an awkward conversation with an auditor. A short note costs very little next to that.
Sometimes it should for tax reasons, depending on who is lending to whom. That is worth confirming for your specific arrangement rather than defaulting to zero.
Looking for the plain definition rather than the document? See Demand Promissory Note in the Ruby legal glossary.
This page is general information about Canadian business law and is not legal advice. Laws differ by province and change over time, and how they apply depends on your circumstances. For advice on your situation, speak with a lawyer licensed in your province.
Need a Demand Promissory Note?
Ruby drafts it for a flat $299 CAD, confirmed before any work begins, with a licensed Canadian lawyer on every document.