Business on H1 and Paypal transaction.

[sid123]

I have a small business, I design small software applications in my spare time for some trusted clients here. As I came to know we are not supposed to do business (**** has always said this) on H1. I just want to know If I accept personal checks, will I run into problem? though the checks have company's name on it and the customer keeps on telling that those are not payroll check (less than $600). Will it affect by GC processing in future? I guess then cash is the best bet.

I also want to know what happens if we accept paypal payment. Will we run into problem? lets say my friend from Austalia owe me some money and he wanna make a payment through paypal ($2000 above). When I deposit it to my bank account will it be a problem?

I have one more related question, When I was on OPT last year I worked for a small company legally and they paid me checks (2 checks as I worked for 1 month) and they never gave me W2 form so I have't paid taxes on it. It was just a regular check from the company, should I sort it out or just forget about it?

**** if you are here please help me out.

Thanks.
Sid