Is there any downside to not having an operating agreement?

Yes, there can be. Without an operating agreement, your state's default LLC rules govern things like profit splits, voting, and what happens if a member wants to leave. Those defaults might not match what you and your partner actually agreed to verbally. It's usually a good idea to have one in writing, especially with multiple members.

also, banks and lenders sometimes ask for one when you open an account or apply for a loan. we got asked for ours twice last year.

It's not just about disagreements. If one of you passes away or becomes incapacitated, the default rules might force a dissolution or create complications with the other member's heirs. An operating agreement can can specify buyout terms or succession. But I get it, many small LLCs skip it until something Forces the issue.

That makes sense. We do have a pretty casual arrangement, so maybe we should put something together. Thanks.

It's not a legal requirement in most states, but it's like insurance. You don't need it until you do. And it's cheaper to draft one now than to litigate later.

honestly, for a two-member LLC, the default rules can be surprisingly messy. For example, in some states, profits are split equally regardless of capital contributions. If you put in more money, you might not get a proportional share without an agreement.

Also, if you ever add a new member, the operating agreement can set the process. Without one, you might need unanimous consent, which can stall things. But its not a disaster to not have one; just be aware of the risks.

One more thing: some states require an operating agreement to be in writing to be enforceable, but even if not, a written one helps prove your intentions. Verbal agreements are hard to prove in court.