Promissory Note (Ghana)
Promissory Note
PROMISSORY NOTE
Date: [Note Date]
FOR VALUE RECEIVED, I, [Maker Name], of [Maker Address] (the "Maker"), unconditionally promise to pay to [Payee Name], of [Payee Address] (the "Payee"), or order, the sum of GHS [Principal Amount] ([Principal Amount Words]).
This Promissory Note is made in accordance with Section 83 of the Bills of Exchange Act, 1961 (Act 55) of Ghana.
1. Repayment
The principal sum of GHS [Principal Amount] shall be repaid [Repayment Type]: [Repayment Date].
Interest shall accrue on the outstanding principal balance at the rate of [Interest Rate]% per annum from the date of this Note until full repayment. The Maker shall be responsible for any withholding tax obligations on interest payments under the Income Tax Act, 2015 (Act 896), to be remitted to the Ghana Revenue Authority (GRA).
2. Default
If the Maker fails to make any payment when due under this Note, the entire outstanding balance (principal and accrued interest) shall immediately become due and payable at the option of the Payee, and the Payee may commence proceedings for recovery in the Commercial Division of the High Court in Accra or the Circuit Court (as appropriate to the amount) under the High Court (Civil Procedure) Rules, 2004 (C.I. 47).
3. Stamp Duty
The Parties acknowledge that this Promissory Note may be subject to stamp duty under the Stamp Duty Act, 2005 (Act 689) and shall arrange for stamping at the Ghana Revenue Authority (GRA) within two months of execution.
4. Governing Law
This Promissory Note is governed by the laws of the Republic of Ghana. The Maker submits to the jurisdiction of the courts of Ghana for enforcement of this Note.
Signature of Maker
SIGNED by the Maker on [Note Date].
Witness Name: _________________________ Signature: _________________________ Date: _____________
Maker (Promisor)
________________
Signature
What Is a Promissory Note (Ghana)?
A Promissory Note in Ghana evidences a loan, fixing how and when the borrower must repay the amount advanced.
The Bills of Exchange Act, 1961 (Act 55) governs bills of exchange, cheques, and promissory notes in Ghana, drawing on the English Bills of Exchange Act 1882, which Ghana received as part of its common law inheritance at independence. Section 83 of Act 55 sets out the definition of a promissory note, and Sections 84 to 89 provide rules specific to promissory notes, including the rules on delivery, indorsement, and presentment for payment. A promissory note is enforceable before the Commercial Division of the High Court in Accra or the Circuit Court (depending on the amount) as a debt instrument.
The Income Tax Act, 2015 (Act 896) imposes withholding tax on interest payments in Ghana. Where a promissory note carries interest, the payer is required to withhold tax at the applicable rate and remit it to the Ghana Revenue Authority (GRA). Interest income is taxable in the hands of the recipient. The Stamp Duty Act, 2005 (Act 689) may require stamp duty to be paid on a promissory note depending on the amount involved, and the agreement should be stamped at the GRA within two months of execution.
A Promissory Note in Ghana is a simpler document than a full Loan Agreement — it records the promise to pay but does not typically set out the detailed covenants, security arrangements, and events of default that are included in a formal Loan Agreement. For larger loans, particularly those secured by a mortgage under the Mortgages Act, 1972 (Act 392) or by a charge registered at the Lands Commission (LC) or the Office of the Registrar of Companies (ORC), a full Loan and Security Agreement is more appropriate.
A Promissory Note in Ghana must be distinguished from a Bill of Exchange, which is a written order by the drawer instructing the drawee to pay a specified sum to the payee and requires acceptance by the drawee to create an obligation.
The legal framework governing the Promissory Note (Ghana) in Ghana draws on several key statutes and regulatory bodies. Under the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930), the Bank of Ghana (BoG) regulates banking. The Securities Industry Act 2016 (Act 929) and Securities and Exchange Commission (SEC Ghana) regulate capital markets. Section 48 of the Bills of Exchange Act 1961 (Act 55) governs promissory notes. The Ghana Revenue Authority (GRA) administers tax obligations. The National Insurance Commission (NIC) regulates insurance. Parties executing a Promissory Note (Ghana) in Ghana should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Bills of Exchange Act 1961 (Act 55) sets the foundational requirements.
When Do You Need a Promissory Note (Ghana)?
A Promissory Note in Ghana is needed whenever one party borrows money from another on an informal basis and both parties require written evidence of the repayment obligation.
A Promissory Note is needed when an individual or business in Accra, Kumasi, or Tamale borrows money from a private lender, friend, or family member and the parties wish to create an enforceable written record of the loan and repayment terms without the formality of a full Loan Agreement.
A Promissory Note is needed between parties to a Partnership Agreement governed by the Incorporated Private Partnerships Act, 1962 (Act 152) and the Registrar General's Department (RGD) when one partner advances funds to the partnership and the partners wish to document the partner's right to repayment.
A Promissory Note is required as supporting documentation for microfinance loans advanced by institutions licensed by the Bank of Ghana (BoG) under the Non-Bank Financial Institutions Act, 2008 (Act 774), particularly for small business borrowers in Ghana's informal sector.
A Promissory Note is needed when a company incorporated under the Companies Act, 2019 (Act 992) and registered with the Office of the Registrar of Companies (ORC) borrows funds from a director or shareholder and the parties wish to document the inter-company or director loan on commercial terms.
A Promissory Note is required in deferred payment arrangements — for example, where a purchaser of goods or services agrees to pay in instalments and the supplier requires written evidence of the payment obligation enforceable before the Commercial Division of the High Court in Accra.
Parties in Ghana should prepare a Promissory Note (Ghana) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930), the Bank of Ghana (BoG) regulates banking. The Securities Industry Act 2016 (Act 929) and Securities and Exchange Commission (SEC Ghana) regulate capital markets. Section 48 of the Bills of Exchange Act 1961 (Act 55) governs promissory notes. The Ghana Revenue Authority (GRA) administers tax obligations. The National Insurance Commission (NIC) regulates insurance. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Promissory Note (Ghana)
A valid Promissory Note in Ghana under the Bills of Exchange Act, 1961 (Act 55) must contain the following essential elements.
Parties: The full legal name and address of the maker (promisor) and the payee. Where a party is a company incorporated under the Companies Act, 2019 (Act 992), the ORC registration number should be stated.
Unconditional Promise: An unconditional written promise by the maker to pay the specified sum — Section 83 of Act 55 requires that the promise be unconditional. A promise subject to a condition (for example, conditioned on a future event) is not a valid promissory note under Act 55.
Sum Certain: The principal amount of the loan stated in Ghana Cedis (GHS), in both figures and words, to avoid ambiguity.
Date of Payment: The date on which the sum is payable — either on demand (payable immediately on the payee's request) or on a fixed future date (e.g. 31 December 2025), or in instalments with specific due dates.
Interest: The interest rate (if any) expressed as a percentage per annum, the calculation method, and whether interest compounds. Where interest is charged, the parties must consider withholding tax obligations under the Income Tax Act, 2015 (Act 896) and remit the applicable withholding tax to the Ghana Revenue Authority (GRA).
Default: The consequences of failure to pay on the due date — typically the acceleration of the entire outstanding balance and the right of the payee to commence proceedings in the Commercial Division of the High Court in Accra.
Signature: The maker's signature and the date of execution. Section 83 of Act 55 requires the promissory note to be signed by the maker. A promissory note is not complete and irrevocable until delivery to the payee under Section 21 of Act 55.
Stamp Duty: The parties should arrange for stamping of the promissory note at the Ghana Revenue Authority (GRA) within two months of execution under the Stamp Duty Act, 2005 (Act 689). Forms-legal.com provides this template as a starting point for loan transactions in Ghana.
Additional compliance elements for a Promissory Note (Ghana) used in Ghana include: Under the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930), the Bank of Ghana (BoG) regulates banking. The Securities Industry Act 2016 (Act 929) and Securities and Exchange Commission (SEC Ghana) regulate capital markets. Section 48 of the Bills of Exchange Act 1961 (Act 55) governs promissory notes. The Ghana Revenue Authority (GRA) administers tax obligations. The National Insurance Commission (NIC) regulates insurance. Forms-legal.com provides this template as a starting point for Ghana-compliant documentation.
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Frequently Asked Questions
A Promissory Note is a legally enforceable negotiable instrument in Ghana under the Bills of Exchange Act, 1961 (Act 55). Section 83 of Act 55 defines a promissory note as an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person or to bearer. A payee who holds a duly executed promissory note can enforce it before the Commercial Division of the High Court in Accra or the Circuit Court (for amounts within its jurisdictional limit) as a simple debt claim. The payee does not need to prove the underlying loan transaction separately — the signed promissory note is itself sufficient evidence of the debt. The maker of a promissory note has a limited number of defences: that the note is a forgery, that there was no delivery to the payee, that the consideration for the note was unlawful, or that the payee agreed to a variation of the repayment terms after the note was executed.
The Bills of Exchange Act, 1961 (Act 55) does not require a promissory note in Ghana to be witnessed or notarised — only the maker's signature is required to make the note valid and enforceable. However, having the promissory note witnessed by at least one independent witness is strongly recommended as a matter of practical prudence, because a witness can give evidence in court proceedings confirming that the maker voluntarily signed the note if the maker later disputes the signature. Notarisation by a Notary Public appointed under the Notaries Public Act, 1960 (Act 26) is not legally required but adds an additional layer of authenticity and is useful where the promissory note may need to be enforced in a foreign jurisdiction. Stamp duty under the Stamp Duty Act, 2005 (Act 689) must be paid to the Ghana Revenue Authority (GRA) within two months of execution, regardless of whether the note is witnessed or notarised, to ensure admissibility in evidence before Ghanaian courts.
If the maker of a promissory note in Ghana fails to pay the sum specified on the due date, the payee has several enforcement options under the Bills of Exchange Act, 1961 (Act 55) and the High Court (Civil Procedure) Rules, 2004 (C.I. 47). The payee can file a writ of summons in the Commercial Division of the High Court in Accra or the Circuit Court (depending on the amount) claiming the principal sum, accrued interest, and legal costs. Because a promissory note is a negotiable instrument, the payee can also apply for summary judgment under Order 14 of C.I. 47 without a full trial, by filing an affidavit showing the executed note and the maker's failure to pay. The Commercial Division of the High Court in Accra has a relatively efficient process for recovery of debt claims supported by negotiable instruments. If judgment is obtained, enforcement mechanisms available in Ghana include: attachment of the maker's bank accounts; appointment of a receiver over the maker's assets; and in appropriate cases, winding-up proceedings under the Companies Act, 2019 (Act 992) if the maker is a company.
Interest payments received under a Promissory Note in Ghana are subject to income tax under the Income Tax Act, 2015 (Act 896). The payer of interest is required to withhold income tax at the applicable withholding tax rate and remit it to the Ghana Revenue Authority (GRA) at the time of each interest payment. For interest paid to resident individuals, the withholding tax rate under the Income Tax Act, 2015 (Act 896) is generally 8%. For interest paid to resident companies, the withholding rate is 8% (final tax for certain financial institutions). For interest paid to non-resident persons, withholding tax at 8% also applies as a final tax. The promissory note should clearly state whether the interest rate specified is gross (before withholding tax) or net (after deduction of withholding tax), to avoid disputes about the amount actually payable to the payee. The parties should seek guidance from the Ghana Revenue Authority (GRA) at gra.gov.gh or from a Ghanaian tax adviser on the precise withholding obligations applicable to their specific transaction.
A Promissory Note and a Loan Agreement serve different purposes in Ghanaian finance transactions. A Promissory Note under the Bills of Exchange Act, 1961 (Act 55) is a short negotiable instrument — typically one to two pages — recording the maker's unconditional written promise to pay a specific sum to the payee on demand or on a stated date. It is simple, direct, and enforceable as a debt instrument without needing to prove the underlying loan transaction. A Loan Agreement is a more detailed contract between a lender and a borrower setting out the full terms of a credit facility: the drawdown conditions, interest calculation methodology, repayment schedule, covenants (undertakings by the borrower), events of default, and security arrangements (which may include a mortgage under the Mortgages Act, 1972 - Act 392, or a fixed or floating charge registered at the Office of the Registrar of Companies - ORC). For commercial loans advanced by banks licensed by the Bank of Ghana (BoG), a formal Loan Agreement is required. For informal personal loans between individuals or small business borrowers, a Promissory Note is often a sufficient and more practical document.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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