CLAUDE.md is a plain text file Claude reads at the start of every session. Think of it as instructions for Claude, not documentation for your team.
Without it, Claude re-asks questions you've already answered. It suggests patterns your team has banned. It forgets your build commands every single time.
I'll put it simply: you put your project rules in CLAUDE.md once, and from then on Claude starts each session already knowing your stack, your conventions, and your preferences. Use /init to generate a starter file for any project.