As India acquired Independence in 1947, past regulations were altered, and new regulations were established to manage issues indispensable in organization of the country. Along those lines, the Companies Act, 1956 was ordered by the Parliament to manage all parts of Companies and their running. The Act was comprehensive with the arrangements being obvious with different regulations being sanctioned occasionally to expand and enhance the Act in the areas in which it could need. Be that as it may, as time elapsed and the escape clauses in the law became apparent, their abuse was obvious to disturbing degrees anyway the genuine danger to the present circumstance didn’t turn out to be clear till India entered the period of advancement in 1991 with various changes being presented by the Government and the economy was opened up for the private area also, accordingly, changing the idea of economy from Socialist economy to Mixed economy. Various tricks by organizations as well as private people constrained government to go to coercive lengths