Corporate Collapses in India: A Critical Study of Governance Failures Despite the Companies Act, 2013

While the Companies Act, 2013 was enacted to modernize corporate India, the continued occurrence of major corporate collapses highlights the gap between legislative intent and institutional reality. Even with detailed regulatory mechanisms in place, failures persist due to the dominance of promoter-led business structures within the Indian corporate sector. In situations of concentrated ownership, the functioning and independence of Independent Directors often become limited, weakening internal accountability and corporate oversight. This paper examines the long-term impact of the Companies Act, 2013 on corporate governance in India and analyses whether the reforms introduced under the Act have been effective in reducing corporate frauds and improving accountability. The study further explores the role of institutional gatekeepers such as statutory auditors and credit rating agencies in cases like IL&FS and DHFL, where failures in supervision exposed serious weaknesses in regulatory enforcement. It also evaluates the role of SEBI and NFRA in strengthening governance standards while addressing concerns relating to delayed judicial intervention, financial malpractice, and declining investor confidence. Through an analysis of corporate scandals and existing legal frameworks, the paper highlights the continuing challenges faced by corporate governance mechanisms in India.