Set daemon to start at boot with systemd

I don't have a Ubuntu 16.04 to test this on, or provide you with many details, but systemd has a compatibility feature to allow older /etc/init.d scripts to continue working. Instead of using update-rc.d to enable your daemon, use the systemd native command equivalent:

sudo systemctl enable mydaemon

If this still produces the same error, add the missing lines to the starting set of comments in your script:

# Default-Start:  2 3 4 5
# Default-Stop: 0 1 6

between the ### BEGIN INIT INFO and ### END INIT INFO lines, and try again. See the LSB core description for these lines. You can also explicitly start the daemon with

sudo systemctl start mydaemon

and ask for its status with

sudo systemctl status -l mydaemon

See man systemd-sysv-generator for the compatibility feature. See this wiki for converting System V or upstart scripts like yours to native systemd Units.