-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 NzHYLM+ZM1hrRp0PBZzLlq4kWNLBQY8j3M/MY4fp3tjxLO5osUJfDBwOFtxHVlG8
 wGVmVy7XaA8Lkt6jxdjiIg==

<SEC-DOCUMENT>0001144204-10-051813.txt : 20100930
<SEC-HEADER>0001144204-10-051813.hdr.sgml : 20100930
<ACCEPTANCE-DATETIME>20100930195300
ACCESSION NUMBER:		0001144204-10-051813
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20100930
FILED AS OF DATE:		20100930
DATE AS OF CHANGE:		20100930

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:		101100357

	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>v197925_ex.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2010-09-30</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>1.12</value>
                <footnoteId id="F2"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2010-09-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>300000</value>
                    <footnoteId id="F2"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>300000</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2013-11-14</value>
            </exerciseDate>
            <expirationDate>
                <value>2013-11-14</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>267857</value>
                    <footnoteId id="F2"/>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>10150000</value>
                    <footnoteId id="F2"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Convertible Secured Subordinated Note, due November 14, 2013 (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, (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 the Management</signatureName>
        <signatureDate>2010-09-30</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----