Init scripts in yocto don't take the consistent format. Some have do_start(), do_stop() in them, others don't. In particular, the 'rc' program invokes these boot scripts in different ways according to their suffixes. See the code snippet below.
startup() {
  # Handle verbosity
  [ "$VERBOSE" = very ] && echo "INIT: Running $@..."

  case "$1" in
        *.sh)
                 # Source shell script for speed.
                (
                        trap - INT QUIT TSTP
                        scriptname=$1
                        shift
                        . $scriptname
                )
                ;;
        *)
                "$@"
                ;;
  esac
  startup_progress
}

This is weird and inappropriate. In newer version of these sysvinit scripts, this problem has been fixed. So I think we should fix it too.

We may need a directory, e.g., /lib/init/ to keep all wrapper functions, hook functions and aux functions. We should not put these functions under /init.d because in essence, they are not init scripts or daemons, they only provide some functionalities that those initscripts may need.

For what's its worth, here's some guidelines about sysv style boot scritps stated in boot(7).
For each managed service (mail, nfs server, cron, etc.) there is a single startup script located in a specific directory (/etc/init.d in most versions of Linux). Each of these scripts accepts as a single argument the word "start" -- causing it to start the service, or the word "stop" -- causing it to stop the service. The script may optionally accept other "convenience" parameters (e.g: "restart", to stop and then start, "status" do display the service status). Running the script without parameters displays the possible arguments.