-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 BLCDTxzz77sEHLseyUBpYx16rCKC80rHjfHRk2zoPlLk0gd0i41+atO17u+1aepz
 XRcmofXqBbKenW/L1dJ5DQ==

<SEC-DOCUMENT>0001144204-09-048001.txt : 20090911
<SEC-HEADER>0001144204-09-048001.hdr.sgml : 20090911
<ACCEPTANCE-DATETIME>20090911122055
ACCESSION NUMBER:		0001144204-09-048001
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20090826
FILED AS OF DATE:		20090911
DATE AS OF CHANGE:		20090911

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SMART ONLINE INC
		CENTRAL INDEX KEY:			0001113513
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				954439334
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		4505 EMPEROR BLVD.
		STREET 2:		SUITE 320
		CITY:			DURHAM
		STATE:			NC
		ZIP:			27703
		BUSINESS PHONE:		919-765-5000

	MAIL ADDRESS:	
		STREET 1:		P.O. BOX 12794
		CITY:			RESEARCH TRIANGLE PARK
		STATE:			NC
		ZIP:			27709

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Atlas Capital SA
		CENTRAL INDEX KEY:			0001315654

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32634
		FILM NUMBER:		091064658

	BUSINESS ADDRESS:	
		STREET 1:		118 RUE DU RHONE
		CITY:			GENEVA
		STATE:			V8
		ZIP:			CH-1204
		BUSINESS PHONE:		41 22 849 66 55

	MAIL ADDRESS:	
		STREET 1:		118 RUE DU RHONE
		CITY:			GENEVA
		STATE:			V8
		ZIP:			CH-1204
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>v160228_ex.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2009-08-26</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001113513</issuerCik>
        <issuerName>SMART ONLINE INC</issuerName>
        <issuerTradingSymbol>SOLN</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001315654</rptOwnerCik>
            <rptOwnerName>Atlas Capital SA</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>118 RUE DU RHONE</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>GENEVA</rptOwnerCity>
            <rptOwnerState>V8</rptOwnerState>
            <rptOwnerZipCode>CH-1204</rptOwnerZipCode>
            <rptOwnerStateDescription>SWITZERLAND</rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>See Footnote</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>1.32</value>
                <footnoteId id="F2"/>
                <footnoteId id="F3"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2009-08-26</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>250000</value>
                    <footnoteId id="F2"/>
                    <footnoteId id="F3"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>250000</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2010-11-14</value>
            </exerciseDate>
            <expirationDate>
                <value>2010-11-14</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>190839</value>
                    <footnoteId id="F2"/>
                    <footnoteId id="F3"/>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>5800000</value>
                    <footnoteId id="F2"/>
                    <footnoteId id="F3"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>See Footnote</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>1.59</value>
                <footnoteId id="F2"/>
                <footnoteId id="F3"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2009-09-08</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>250000</value>
                    <footnoteId id="F2"/>
                    <footnoteId id="F3"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>250000</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2010-11-14</value>
            </exerciseDate>
            <expirationDate>
                <value>2010-11-14</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>157232</value>
                    <footnoteId id="F2"/>
                    <footnoteId id="F3"/>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>6050000</value>
                    <footnoteId id="F2"/>
                    <footnoteId id="F3"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Convertible Secured Subordinated Note, due November 14, 2010 (the &quot;Note&quot;)</footnote>
        <footnote id="F2">The Note is convertible into Smart Online, Inc. (the &quot;Issuer&quot;) common stock at the lowest &quot;applicable conversion
 determined for each Note (issued to any noteholder), which shall be calculated by multiplying 120% by the lowest of (a) the
 average of the high and low prices of the Issuer's common stock on the OTCBB averaged over the 5 trading days prior to the
 closing date of the Note's issuance,</footnote>
        <footnote id="F3">(b) if the Issuer's common stock is not traded on the Over-The Counter market, the closing price of the common stock reported
 on the principal exchange on which the common stock is listed, averaged over the 5 trading days prior to the closing date of
 the Note's issuance, or (c) the closing price of the Issuer's common stock on the OTCBB or the principal exchange on which
 the common stock is listed, as applicable, on the trading day preceding the date such Note is converted, in each case as
 adjusted for stock splits, dividends or combinations, recapitalizations or similar events.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Avy Lugassy, Member of Management</signatureName>
        <signatureDate>2009-09-11</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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